Netshoes Securities Litigation Settlement

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Netshoes Securities Litigation Settlement
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The information contained on this web page is only a summary of information presented in more detail in the Notice of Proposed Settlement of Class Action, (the “Notice”), which you can access by clicking here. Since this website is just a summary, you should review the Notice for additional information.

 If you are a Settlement Class Member, your legal rights will be affected by this Settlement whether you act or do not act. 

Please read the Notice carefully.

 IF YOU PURCHASED OR OTHERWISE ACQUIRED Netshoes (Cayman) Limited COMMON STOCK PURSUANT OR TRACEABLE TO THE COMPANY’S REGISTRATION STATEMENT AND PROSPECTUS ISSUES IN CONNECTION WITH NETSHOES’ APRIL 2017 INITIAL PUBLIC OFFERING (THE “SETTLEMENT CLASS”) YOU ARE A CLASS MEMBER.

YOUR LEGAL RIGHTS AND OPTIONS IN THE SETTLEMENT:

ACTIONS YOU MAY PURSUE

EFFECT OF TAKING THIS ACTION

  SUBMIT A PROOF OF CLAIM

 

This is the only way to be eligible to receive a payment from the Settlement.  Claim Forms must be postmarked (if mailed) or received (if submitted online) on or before December 17, 2020.

EXCLUDE YOURSELF FROM THE SETTLEMENT

 

Get no payment.  This is the only option that allows you to ever be part of any other lawsuit against the Defendants about the legal claims related to the issues raised in this Litigation.  A written request for exclusion must be postmarked no later than November 17, 2020. 

OBJECT TO THE SETTLEMENT BY SUBMITTING A WRITTEN OBJECTION

 

You may object to the requested attorneys’ fees, cost, and expenses, Lead Plaintiff’s request for an award for representing the Settlement Class, and /or the Plan of Allocation. Objections must be filed with the Court and served on the parties by November 17, 2020.

 ATTEND THE SETTLEMENT HEARING   ON NOVEMBER 23, 2020 AT 10:00,   AND FILE A NOTICE OF INTENTION     TO APPEAR

 Requests to speak mus be filed with the Court and served on the   parties no later than November 17, 2020.

  DO NOTHING

Receive no payment.  You will, however, still be a Class Member, which means that you give up your right to ever be part of any other lawsuit against the Defendants about the legal claims being resolved by this Settlement and you will be bound by any judgments or orders entered by the Court in the Litigation. 


The Settlement Hearing

The Court will hold a Settlement Fairness Hearing via Skype Business on November 23, 2020, at 10:00 a.m., before the Honorable Andrew Borrok at the Supreme Court of the State of New York, County of New York: Commercial Division, 60 Centre Street, New York, NY 10007, for the purpose of determining whether: (i) the Settlement, as set forth in the Stipulation, for $8,000,000 in cash should be approved by the Court as fair, reasonable, and adequate; (ii) Judgment, as provided under the Stipulation, should be entered; (iii) to award Plaintiff’s Counsel attorneys’ fees and expenses out of the Settlement Fund and, if so, in what amount; (iv) to pay Lead Plaintiff for their efforts in representing the Settlement Class out of the Settlement Fund and, if so, in what amount; and (v) the Plan of Allocation should be approved by the Court.  Details about how to access the Settlement Fairness Hearing via Skype will be posted on this website once available.  Any updates and/or changes to the scheduling of the Settlement Fairness Hearing will be posted on the website as well.  The Court may adjourn or continue the Settlement Fairness Hearing without further notice to members of the Settlement Class.

What is this case about?

At the time of the IPO, Netshoes was the holding company of a sports and lifestyle online retailer operating in Brazil, Argentina, and Mexico and one of the largest online retailers in Latin America, as measured by net sales.  Netshoes is currently a wholly owned subsidiary of Magazine Luiza, one of Brazil’s largest retail companies.  Lead Plaintiff claims that Defendants violated §§11, 12(a)(2), and 15 of the Securities Act of 1933 (the “Securities Act”) by reason of material untrue statements in the Registration Statement and Prospectus for Netshoes’ IPO.  Specifically, Lead Plaintiff alleges that the Registration Statement and Prospectus included untrue material statements about, and failed to disclose material information regarding, Netshoes’ improper recognition of revenue from its Business-to-Business (“B2B”) operation, which Defendants emphasized to investors as forming a key part of Netshoes’ long-term business strategy in the IPO.  Lead Plaintiff alleges that Netshoes had negotiated rights of return on its reported sales to B2B customers, such that the “sales” were contingent on the customers’ resale of the goods to end-user consumers.  However, instead of waiting to recognize revenue until after the resale of the products to end-user consumers or recognizing a liability for future returns, as called for under the International Financial Reporting Standards Netshoes claimed to adhere to, Lead Plaintiff alleges that Netshoes prematurely – and improperly – recognized B2B revenue before customer sell-through had occurred, thereby inflating its reported revenue.

Defendants deny all of Lead Plaintiff’s allegations.  Without limiting the generality of the foregoing in any way, Defendants have denied, and continue to deny, among other things, that any misstatements or materially misleading omissions were made or that Lead Plaintiff or the Settlement Class have suffered any damages.  Defendants do not admit any liability or wrongdoing in connection with the allegations set forth in the Litigation or any facts related thereto.

The Settlement Benefits

The Settlement, if approved, will result in the creation of a cash settlement fund of $8,000,000 (the “Settlement Fund”).  The Settlement Fund, plus accrued interest and minus the costs of this Notice and all costs associated with the administration of the Settlement Fund, as well as attorneys’ fees and expenses, and the award to Lead Plaintiff for representing the Settlement Class, as approved by the Court (the “Net Settlement Fund”), will be distributed to eligible Settlement Class Members pursuant to the Plan of Allocation that is described in the Notice.

Further Information

This website and the Notice summarize the Settlement.  For more details regarding the Settlement please reference the Settlement Agreement, or other documents filed in the case under the “Court Documents” link on the left.  You may also contact the Claims Administrator or Lead Counsel for further information regarding the Settlement:

Claims Administrator:

Netshoes Securities Litigation Settlement

c/o A.B. Data, Ltd.

PO Box 173108

Milwaukee, WI  53217

(877) 869-0224

info@NetshoesSecuritiesLitigation.com


Lead Counsel:

Deborah Clark-Weintraub, Esq.

Patrick J. McGahan, Esq.

Jeffrey P. Jacobson, Esq.

SCOTT+SCOTT ATTORNEYS AT LAW LLP

The Helmsley Building

230 Park Avenue, 17th Floor

New York, NY 10169

Telephone: (800) 404-7770



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