IN RE PAYSAFE LIMITED f/k/a FOLEY TRASIMENE ACQUISITION CORP. II SECURITIES…

Background

The related actions were proposed securities class actions under the Securities Exchange Act of 1934. The complaints alleged that Paysafe Limited, formerly Foley Trasimene Acquisition Corp. II, and certain current and former officers and directors made materially false or misleading statements and failed to disclose adverse information about Paysafe’s business, including the effects of gambling regulations in European markets, challenges in the Digital Wallet segment, and delays involving new e-commerce customer agreements. The proposed class covered people and entities that purchased or acquired Paysafe or FTAC securities between December 7, 2020, and November 10, 2021.

The court had previously granted consolidation of the related actions. Seven motions initially sought appointment as lead plaintiff and approval of lead counsel. By the time of this opinion, the court considered competing applications from Robert J. Viani and Eric C. Price, together referred to as the Viani/Price Group, and Campbell Capital Management. Viani and Price sought appointment for themselves and approval of Kessler Topaz Meltzer & Check, LLP. Campbell Capital Management sought appointment for itself and approval of Glancy Prongay & Murray LLP.

Legal standard

The Private Securities Litigation Reform Act requires the court to appoint the class member or group of class members most capable of adequately representing the class. The statute generally creates a presumption in favor of the movant or group that timely applied, has the largest financial interest, and makes a preliminary showing that it meets the relevant requirements of Federal Rule of Civil Procedure 23. At this stage, the court focused on whether the proposed lead plaintiffs’ claims were typical of the class and whether they could adequately represent the class.

The statute also gives the selected lead plaintiff authority to choose class counsel, subject to court approval. The court stated that it should not disturb that choice unless necessary to protect the class’s interests.

Court’s analysis

Both the Viani/Price Group and Campbell Capital Management filed timely applications. The court determined that Viani and Price had the largest financial interest, with combined losses of approximately $3,819,459 calculated using the last-in, first-out method. Campbell Capital Management’s assigned claims reflected losses of approximately $2,902,048.

Although Viani and Price had no relationship before this litigation, they submitted evidence describing how they would cooperate and make joint decisions. The court also considered them sophisticated investors with business and investment experience. It concluded that they made the required preliminary showing that their claims were typical of the proposed class and that they could adequately represent it. The court noted that their interests aligned with other investors who allegedly were harmed by the defendants’ statements and that they had committed to fulfilling lead-plaintiff responsibilities.

The court also considered concerns about Campbell Capital Management’s assigned claims. It stated that the assignments could be challenged, that they appeared potentially revocable, and that litigation over the assignments and Campbell Capital Management’s standing could interfere with efficient discovery. The court concluded that Campbell Capital Management had not rebutted the presumption favoring Viani and Price.

The court approved Viani and Price’s selection of Kessler Topaz Meltzer & Check, LLP as lead counsel after finding that the firm was qualified to handle the complex securities class action. The court also noted the firm’s experience in securities litigation.

Order

The court GRANTS Viani and Price’s motion at ECF No. 19 to be appointed lead plaintiffs and to have their selected counsel approved as lead counsel. It DENIES all other motions at ECF Nos. 16, 21, 23, 30, 36, and 37, as well as the pending motions in the related O’Brien case at ECF Nos. 6 and 9.

The court ordered that the plaintiffs’ amended complaint in the consolidated action be filed within 45 days of the opinion and order. Defendants’ motions to dismiss would be due 60 days after the amended complaint, plaintiffs’ opposition would be due 60 days after those motions, and defendants’ replies would be due 30 days after the opposition. The court also stayed discovery pending resolution of the motions to dismiss. Judge Katharine H. Parker signed the opinion and order.