Wolfspeed Investors Challenge Ex-Officials’ Liability Shields

Court-appointed plaintiffs in a securities class action against Wolfspeed Inc. are seeking to opt out of liability shields for former officials on behalf of all proposed class members in the chipmaker’s bankruptcy case.

Most putative class members didn’t receive notice of the releases or opt-out procedures in Wolfspeed’s proposed Chapter 11 reorganization plan, the plaintiffs argued in a motion filed July 18 in the US Bankruptcy Court for the Southern District of Texas. The plan would provide protection to former officials named in a securities suit last year.

Without court approval to reject the releases on behalf of the proposed ...