Bloom Energy Gets Nod to Settle IPO Class Action for $3 Million

Bloom Energy Corp., its leadership, and underwriters will pay $3 million to settle allegations that the company made misleading statements related to its initial public offering, according to a federal judge’s order granting preliminary approval of the deal.

The settlement would benefit a class of investors who acquired shares of Bloom Energy stock between the company’s July 25, 2018 IPO and March 31, 2020, according to the order filed Tuesday is US District Court for the Northern District of California.

Bloom, its officers, and directors, as well as its underwriters and auditors, had allegedly misrepresented or omitted key information in the IPO registration statement, the shareholders said in their suit filed May 2019.

The underwriters for the IPO were J.P Morgan Securities LLC, Morgan Stanley & Co. LLC, Credit Suisse Securities LLC, KeyBanc Capital Markets Inc., Cowen and Company LLC, HSBC Securities Inc, Oppenheimer & Co. Inc., Raymond James & Associates Inc., Robert W. Baird & Co. Inc., and Merrill, Lynch, Pierce, Fenner & Smith Inc. Those defendants are also included in the settlement.

The San Jose, Calif., company concealed that it was facing significant construction delays that interfered with installations, as well as issues regarding the efficiency of its energy server technology, and defendants violated the Securities Exchange Act, the plaintiffs alleged on behalf of the investor class.

Judge Haywood Gilliam Jr.preliminarily approved the deal after more than three years of litigation, during which he trimmed the allegations by partially granting three separate motions to dismiss. Bloom’s independent auditor, PricewaterhouseCoopers LLP, exited the case after he granted its motion to dismiss on Sept. 29, 2021.

Mediation began in December 2022, and the parties agreed to a settlement proposal in June 2023, which includes the $3 million payment to all investors with shares traceable to the Bloom IPO registration statement or acquired on the open market during the nearly two-year class period.

The deal releases all demands and liabilities against defendants, who did not concede any wrongdoing in the settlement proposal.

The plaintiffs anticipate mailing notice of the settlement to approximately 100,000 potential class members, according to the order.

The court appointed Levi & Korsinsky LLP as class counsel, and the lawyers can apply for attorneys’ fees up to $990,000, or 33% of the total monetary settlement amount, the order says. The lawyers for plaintiffs at that firm and Hagens Beman Sobol Shapiro LLP didn’t immediately respond to requests for comment.

Gilliam gave the parties seven days to meet and agree upon a schedule of dates to notify class members, file further motions, and hold final hearings on the settlement.

Bloom and its lawyers at Sidley Austin LLP didn’t immediately respond to a request for comment.

Oppenheimer & Co. and KeyBanc spokespeople declined to comment. All other underwriter defendants and their lawyers at Morgan, Lewis & Bockius LLP didn’t immediately respond to requests for comment.

The case is Hunt v. Bloom Energy Corp., N.D. Cal., No. 4:19-cv-02935, 10/31/23.