Loop Industries Asks to Toss Suit Based on Short Seller’s Report

Sustainable plastics startup Loop Industries Inc. asked a New York federal court to dismiss an investor lawsuit that relied on a short seller’s report with anonymous sources to question the company’s viability.

The plaintiffs failed to provide their own, independent factual allegations that would corroborate the allegations raised by Hindenburg Research, Loop said in a motion to dismiss filed June 11 in the U.S. District Court for the Southern District of New York.

Loop’s share price fell more than 32% after Hindenburg issued a report last October questioning whether the company’s recycling technology could break down certain plastics and recover ...