NEWS

Gardy & Notis, LLP is co-lead counsel for stockholders suing certain current and former directors and other insiders of Renren, Inc. for transferring Renren's investment portfolio to an entity controlled by Renren's CEO at a severely undervalued price in June 2018.

After three years of litigation and three successful appeals, Gardy & Notis, LLP achieved a settlement that includes a $300 million cash recovery for stockholders, plus substantial changes to improve Renren's corporate governance. The $300 million recovery is also protected from dilution stemming from additional share issuances and/or market sales by Renren insiders. The settlement provides for defendants to pay the greater of (a) $300 million or (b) the sum of $38.3134 per Renren American Depositary Share (ADS) multiplied by the number of issued and outstanding ADS held by Renren stockholders.

The $300 million recovery is a massive win for public stockholders. The price of Renren's publicly traded ADS was less than $16 per share at the time the settlement was reached, and the recovery represents 140% more than the cash dividend Renren stockholders received in June 2018 in connection with the transfer transaction.

The $300 million recovery is also believed to be the largest cash settlement of any direct pay derivative case, where the payment is made directly to public stockholders. While derivative cases generally seek to recover damages incurred by the company itself, structuring the settlement as a direct payment means that the cash recovery on behalf of the company would be shared solely by public stockholders and not the individuals alleged to have committed the underlying wrongdoing and who continue to own a controlling stake in the company.

The case is In re Renren, Inc. Derivative Litigation, Index No. 653594/2018, in the Supreme Court of the State of New York, New York County, Commercial Division.