Richards’ lawsuit, filed in August 2022, contended that Kensington’s board members had personal stakes in the deal through “founder shares”—a lucrative setup where insiders acquired 20% of Kensington’s stock for just $25,000. This, Richards argued, created a conflict of interest, making the merger more about self-enrichment than stockholder value.
Deceptive Dealings?
Richards alleged that the merger proxy statement was misleading, painting Kensington’s board as impartial when, in reality, board members stood to gain financially. He further claimed that they failed to negotiate fair terms, ignored third-party valuations, and misrepresented the level of due diligence conducted on QuantumScape.
The fallout from the merger did not stop there. QuantumScape found itself embroiled in multiple lawsuits, including a high-profile shareholder suit in California federal court over claims that it misrepresented its battery technology’s progress. That case ended in a $47.5 million settlement in January.
Attorneys and Legal Fees
The recent $8.75 million settlement still requires court approval. If finalized, Richards’ legal team plans to seek attorney fees not exceeding 20% of the settlement amount.
