In re Energy Recovery, Inc. Securities Litigation

Frequently Asked Questions

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1. What is the current case status?

The Initial Distribution of the In re Energy Recovery, Inc. Securities Litigation took place on Friday, April 27, 2018. A Second Distribution took place on Tuesday, May 16, 2023.

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2. How Can I request a replacement check?

We are no longer reissuing checks from the Initial Distribution. If you require a replacement of your check from the Second Distribution, you must submit a written request, stating your name, claim number, current address, and reason a new check is required. This request can be submitted in writing to:

In re Energy Recovery, Inc. Securities Ligation
PO Box 9349
Dublin, OH 43017-4249

Or emailed to:

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3. What is this lawsuit about?

Lead Plaintiff's Second Amended Class Action Consolidated Complaint for Violation of Federal Securities Laws (the "Complaint") filed on May 26, 2016, alleges that Energy Recovery and Mr. Rooney violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, promulgated thereunder by the United States Securities and Exchange Commission. The Complaint also generally alleges that Energy Recovery and Mr. Rooney made false and misleading statements regarding Energy Recovery's products and operations and seeks unspecified money damages and other relief. When this information became public, the Complaint alleges that the share price fell and shareholders were damaged. The Complaint also asserted "control person" claims against the individual defendants, Mr. Rooney and Ms. Bold, under Section 20(a) of the Securities Exchange Act of 1934. The lawsuit seeks money damages against Defendants for alleged violations of the federal securities laws. Defendants believe that the claims asserted in the action are completely without merit. Defendants have denied and continue to deny any and all wrongdoing whatsoever and maintain that their conduct was at all times proper and in compliance with applicable provisions of law. Defendants have denied and continue to deny each and all of the claims and contentions alleged by Lead Plaintiff in the Litigation and deny that they have committed any of the wrongful acts or violations of law that are alleged in the Litigation, especially the central premise of Plaintiff's claims that Energy Recovery's products remained in the engineering prototype phase during the Class Period. Defendants assert that Plaintiff is unable to prove falsity or scienter in support any of his allegations. Defendants deny all charges of wrongdoing or liability against them arising out of any of the conduct, statements, acts, or omissions alleged, or that could have been alleged, in the Litigation. Defendants also have denied and continue to deny, among other things, the allegations that Lead Plaintiff or the Settlement Class have suffered damages and that Lead Plaintiff or the Settlement Class were harmed by the conduct alleged in the Consolidated Complaint or its predecessor complaints.

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4. Why is this a class action?

In a class action, one or more people called Class Representatives (in this case, the Lead Plaintiff Henry Low), sue on behalf of people who have similar claims. All persons with similar claims are Settlement Class Members, who together constitute the class. Bringing a case, such as this one, as a class action allows the collective adjudication of many similar claims that might be economically too small to bring in individual actions. One court resolves the issues for all class members, except for those who exclude themselves from the class. Judge Edward Chen of the United States District Court for the Northern District of California is overseeing this class action.

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5. Why is there a settlement?

The Court did not decide in favor of Lead Plaintiff or Defendants. Instead, both sides agreed to a settlement. In this manner, they avoid the risks of further litigation and trial, including the risk that there would be no recovery by any members of the Settlement Class. The Lead Plaintiff and their attorneys think the Settlement is best for all Settlement Class Members. The settling Defendants in this Litigation, while continuing to deny all allegations of wrongdoing or liability whatsoever, recognize the expense, risks and uncertain outcome of litigation and appeals, especially in a complex action such as this, and wish to avoid the uncertainties, burdens and costs associated with further litigation.

Because of the risks associated with continuing to litigate and proceeding to trial, there was a danger that Lead Plaintiff would not have prevailed on any of his claims, in which case the Settlement Class would receive nothing. The Defendants have asserted that they did not engage in any wrongful conduct and have no liability for any breach of the federal securities laws. Thus, there is a risk that Lead Plaintiff would not have established any liability or damages against the Defendants. Lead Plaintiff and his attorneys think the Settlement is best for all members of the Class.

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6. How do I know if I am part of the Settlement?

The Court directed that, for the purposes of the proposed Settlement, everyone who fits this description is a Settlement Class Member: all Persons (as defined in the Stipulation) who purchased the common stock of Energy Recovery during the period March 7, 2013 through March 5, 2015, inclusive.

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7. What does the Settlement provide?

Defendants have agreed to the creation of a $3.85 million fund to be distributed, after the payment of claims administration and notice costs and Plaintiff's Counsel's attorneys' fees and expenses as awarded by the Court, to all Settlement Class Members who send in a valid and timely Proof of Claim. In return, the Litigation will be dismissed and Lead Plaintiff and all Settlement Class Members who did not timely and validly request exclusion from the Settlement Class agree to release, relinquish and discharge all Released Claims (including Unknown Claims) against the Defendants, Energy Recovery, and their respective Related Persons, whether or not these members of the Settlement Class executed and delivered the Proof of Claim.

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8. How can I get a payment?

To qualify for a potential payment, you must have submitted a Proof of Claim and Release Form with appropriate supporting documentation, which accompanied the Notice. Any Settlement Class member who did not submit a Proof of Claim will be forever barred from receiving any distribution from the Settlement Fund (unless by Court order), but otherwise shall be bound by all of the terms of the Stipulation and the Settlement, including the releases in the Stipulation, and will be permanently barred and enjoined from commencing or prosecuting any action asserting any Released Claims against any Released Persons.

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9. When would I get my payment?

The Initial Distribution of the In re Energy Recovery, Inc. Securities Litigation took place on Friday, April 27, 2018.

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10. How was my payment calculated?

Each Authorized Claimant's pro-rated payment was based on their Recognized Claim, which was calculated in accordance with the Court-approved Plan of Allocation, which can be found on pages 4 through 5 of the Notice of Pendency and Proposed Settlement of Class Action.

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For all other questions, please refer to the Notice.