SCWorx Says it Received Final Approval to Settle Lawsuits; Shares Up 24%
July 06 2022 - 1:29PM
Dow Jones News
By Stephen Nakrosis
SCWorx Corp. said Wednesday it has received final court approval
to settle a securities class action and derivative action lawsuits,
both of which were commenced in 2020.
The class action settlement "resolves all claims asserted
against SCWorx and the other named defendant without any admission
of liability or wrongdoing by the company or any defendant," SCWorx
said.
Under the terms of the class action agreement deal, insurers for
SCWorx and former Chief Executive Marc Schessel will make a payment
to class plaintiffs and SCWorx will issue $600,000 of common stock
to class plaintiffs, the company said.
The agreement to settle the derivative action lawsuit will see
the company adopt corporate governance reforms, SCWorx said, adding
an insurer for the director defendants will make a cash payment to
legal counsel for the plaintiffs to cover legal fees.
In May, the U.S. Securities and Exchange Commission said it
charged SCWorx Corp. and its former CEO and Chairman Marc S.
Schessel "with making false and misleading statements about
SCWorx's plans to distribute Covid-19 rapid test kits in April
2020." The SEC said SCWorx agreed to settle the charges and pay a
$125,000 civil penalty. Last month, SCWorx said it received final
court approval to settle the SEC matter.
Tim Hannibal, the company's president and chief executive, said
"over the past two years, SCWorx has successfully negotiated a
number of significant legal obstacles resulting from a press
release in April 2020." He added "the final court approval of the
class and derivative settlements - together with our final
agreement with the Securities and Exchange Commission in 2022 -
will put the legal issues relating to press release behind us and
allow us to move forward."
At 12:05 p.m. ET, the company's stock climbed 24.21% to 77 cents
per share. Volume topped 27.2 million shares, above the stock's
65-day average volume of 216,263.
Write to Stephen Nakrosis at stephen.nakrosis@wsj.com
(END) Dow Jones Newswires
July 06, 2022 13:14 ET (17:14 GMT)
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