Oatly (OTLY) $9.25M Settlement Over Financial Mirepresentation and China Growth Issues

Late claims are being considered for compensation, subject to approval.

S.D. New York

Court

1:21-cv-06360

Case number

05/20/2021

Class period Start

11/15/2021

Class period End

07/25/2024

Claim deadline

Oatly (OTLY) agreed to settle $9.25M with shareholders to end claims over exaggerating uniqueness and China success.

Outline

In 2021, Spruce Point Capital claimed that Oatly exaggerated its financials and overstated its growth in China. This article also caused numerous reports exposing major issues in Oatly's finances and business practices. Following this, $OTLY significantly fell, and Oatly faced a lawsuit from investors.

Timeline
On July 14, 2021: Spruce Point Capital accused Oatly of financial misstatements and exaggerating growth in China.
On July 14, 2021: Following this report, $OTLY fell 2.8%.
On July 15, 2021: Further news supported the allegations in the Spruce Point report.
On July 15, 2021: After that, $OTLY fell again by 5.36%.
On July 26, 2021: Stockholders filed a lawsuit against Oatly for misleading investors about its financial health, sustainability practices, and growth in China.
Background

Oatly highlighted strong financial performance and impressive growth in China as key advantages for its U.S. IPO. 

However, on July 14, 2021, Spruce Point Capital Management released a report accusing Oatly of manipulating its financial metrics and overstating revenue, gross margins, and market share. 

It also claimed that Oatly exaggerated its sustainability by using old studies and only showing positive data, ignoring negative effects like high water usage 

The report accused Oatly of exaggerating its growth in China, while Oatly claimed a 450% sales growth and more than 10000 cafes in mainland China, SEC filings indicated only 8000 to 8200 locations. 

Moreover, it was said that Oatly's Maanshan facilities were delayed, not nearly operational as claimed, which raised doubts about Oatly's reported growth.

Following this report, $OTLY dropped by 2.8%.

Further investigation from CNBC and Fortune also found major issues with Oatly’s financial reports and business practices. These media investigations supported Spruce Point's claims, raising more questions about Oatly's financial practices and business claims.

Following that, in July 2021, Oatly was sued by investors who claimed the company misled them about its financial health and reporting practices.

What can investors expect now?

Oatly (OTLY) agreed to settle $9.25M with shareholders to end claims over exaggerating uniqueness and China success.

If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section below.

Case Status

Accepting Late Claims

Alleged Offence

Mismanagement,

Misleading Statements,

Omissions

Suspected Party

Directors,

Management

Security Type

Stocks

Trade Direction

Long

Filing date

07/26/2021

Plaintiffs

Kai Jochims

Attorneys

Robbins Geller Rudman & Dowd LLP, Scott + Scott Attorneys at Law LLP

Defendants

Toni Petersson, Christian Hanke, Steven Chu, Ann Chung, Bernard Hours, Hannah Jones, Mattias Klintemar, Po Sing (Tomakin) Lai, Eric Melloul, Bjorn Oste, Frances Rathke, Yawen Wu, Tim Zhang, Fredrik Berg

Judge

Alvin K. Hellerstein

Attorney fee

$9,250,000

Trades matching type

FIFO

+$9,250,000

Cash Settlement Amount

Frequently Asked Questions

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Do I have to sell securities to be eligible?

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