NEW YORK–(BUSINESS WIRE)–Labaton Sucharow LLP (“Labaton Sucharow”) has filed a securities class action lawsuit against Changyou.com Limited (NYSE: CYOU) (“Changyou” or the “Company”) and certain of its executives, as well as its acquirer Sohu.com Limited (Nasdaq Ticker: SOHU) (collectively, “Defendants”). The action asserts claims under Sections 10(b), 13(e), and 20(a) of the Securities Exchange Act of 1934, and U.S. Securities and Exchange Commission Rules 10b-5 and 13e-3 promulgated thereunder, on behalf of all former owners of Changyou stock and American Depositary Shares (“ADSs”) who sold shares, and were damaged thereby, during the period between February 14, 2020 and April 23, 2020 inclusive (the “Class Period”).
On February 14, 2020, Changyou, Sohu.com Limited, Sohu.com (Game) Limited, and Changyou Merger Co. Limited jointly filed a Rule 13E-3 Transaction Statement under Section 13(e) of the Securities Exchange Act (the “Transaction Statement”). The Transaction Statement contained false and misleading information regarding the existence of dissenters’ rights (also known as appraisal rights) pursuant to Cayman Islands law.
For instance, The Transaction Statement stated in no uncertain terms:
No Dissenters’ or Appraisal Rights
As the Merger is a short-form merger under section 233(7) of the Cayman Islands Companies Law, and the vote of holders of the Company’s Shares (including ADSs) is not required to complete the Merger, the Unaffiliated Security Holders will not be able to exercise dissenters’ rights such as are afforded to shareholders of Cayman Islands companies pursuant to Section 238 of the Cayman Islands Companies Law with respect to mergers for which a shareholder vote is required. A copy of Section 238 of the Cayman Islands Companies Law is attached as Exhibit (f)(2) to this Transaction Statement for the information of the Unaffiliated Security Holders.
The Transaction Statement is false and misleading because it provided no support for such conclusion and it is at odds with the text of the relevant Cayman Islands statute regarding appraisal rights. Moreover, the Transaction Statement failed to disclose other rights that may be available to Changyou shareholders under Cayman Islands law, in clear violation of the federal securities laws.
On April 17, 2020, the Merger closed without the truth being revealed. Changyou ADS shares were exchanged for the cash consideration on April 23, 2020.
If you sold Changyou stock or ADSs during the Class Period, you are a member of the “Class” and may be able to seek appointment as Lead Plaintiff. Lead Plaintiff motion papers must be filed with the United States District Court for the Southern District of New York no later than February 8, 2021. The Lead Plaintiff is a court-appointed representative for absent members of the Class. You do not need to seek appointment as Lead Plaintiff to share in any Class recovery in this action. If you are a Class member and there is a recovery for the Class, you can share in that recovery as an absent Class member. You may retain counsel of your choice to represent you in this action.
If you wish to learn more about your rights, please contact David J. Schwartz using the toll-free number (800) 321-0476 or via email at firstname.lastname@example.org.
About the Firm
Labaton Sucharow LLP is one of the world’s leading complex litigation firms representing clients in securities, antitrust, corporate governance and shareholder rights, and consumer cybersecurity and data privacy litigation. Labaton Sucharow has been recognized for its excellence by the courts and peers, and it is consistently ranked in leading industry publications. Offices are located in New York, NY, Wilmington, DE, and Washington, D.C. More information about Labaton Sucharow is available at http://www.labaton.com.