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Li-Cycle Holdings Corp. Implements Shareholder Rights Plan and Addresses Construction Halt

Li-Cycle Holdings Corp., a lithium-ion battery resource recovery company based in Toronto, has announced the adoption of a limited duration shareholder rights plan. Simultaneously, the company has also made the difficult decision to furlough or lay off around 20 employees due to the construction pause at the Rochester Hub.

Protecting the Long-Term Interests of Li-Cycle and its Shareholders

In their news release about this development, Li-Cycle describes the rights plan as an important measure aimed at safeguarding the long-term interests of the company and its shareholders.

The company further explains that the plan has been designed to prevent any unfair treatment of its shareholders and to reduce the likelihood of any person or group gaining control of, or significantly influencing, Li-Cycle. This includes any attempts to accumulate company shares without appropriately compensating the existing shareholders for relinquishing control.

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In this situation, the AI legalese decoder can be immensely helpful. The AI technology can analyze and decode complicated legal terms and jargon, making it easier for both businesses and shareholders to understand the details and implications of the shareholder rights plan. By simplifying the language used, the AI legalese decoder enables effective communication and informed decision-making.

Construction Pause Impacts Employees

Li-Cycle recently halted the construction of its $485 million Rochester Hub due to a significant rise in construction costs compared to the budgeted estimates. The company will provide more information regarding the future of the project in its upcoming quarterly financial report on November 13.

As a result of the construction pause, approximately 20 Li-Cycle employees will be affected. The majority of them will be furloughed, while some will unfortunately be laid off. This decision has also impacted over 200 union trade workers and 102 non-union employees of MasTec, who are now left without work.

RELATED: Two stockholder-rights law firms launch investigations into Li-Cycle

The Shareholder Rights Plan and Its Parameters

The shareholder rights plan adopted by Li-Cycle follows the model of plans implemented by publicly traded companies in the U.S. Each common share of outstanding stock held by shareholders as of November 10 will be entitled to receive one right.

According to the company, these rights will only become exercisable if an individual or group acquires beneficial ownership of 20 percent or more of the company’s shares through an unapproved transaction. In such a scenario, each holder of the rights will have the option to purchase a specific number of common shares at a price of $12.50, with the number determined by the market value at that time.

Additionally, if an individual or group acquires 20 percent or more of Li-Cycle’s common shares, the board of directors may choose to declare all or part of the rights as exercised, allowing the holder to acquire one common share for each outstanding right at no cost.

The rights plan will remain in effect until October 30, 2024.

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The AI legalese decoder can play a crucial role here by decoding the intricate legal language used in shareholder rights plans. Its ability to simplify complex terms can assist both shareholders and legal professionals in comprehending the nuances of the plan, facilitating transparency and equitable decision-making.

Investigations Launched by Stockholder-Rights Law Firms

Two New York City-based law firms, Bragar Eagel & Squire, P.C., and Kirby McInerney LLP, have announced that they are launching investigations into potential claims against Li-Cycle. These firms are specifically looking into whether the company or its officers have violated federal securities laws or engaged in any other unlawful business practices.

Another law firm, the Law Offices of Frank R. Cruz in Los Angeles, has also initiated a similar investigation.

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