UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
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| Item 8.01 | Other Events |
On March 3, 2022, a putative stockholder class action and derivative complaint was filed in the Delaware Court of Chancery by M. Samim Ezzat, a stockholder, against Exela Technologies, Inc. (the “Company”) and its current directors (the “Action”). The complaint sought a declaration that the Company violated Section 2.6 of the Company’s then-bylaws by treating uninstructed shares as broker non-votes with respect to a proposal to approve an amendment and restatement of the Company’s 2018 Stock Incentive Plan. After the complaint was filed, the Company determined to take certain corrective actions to moot the allegations in the complaint, including amending the Company’s bylaws and rescinding the plan proposal.
On September 12, 2022, the Court of Chancery entered an order pursuant to which plaintiff voluntarily dismissed the Action without prejudice. The Court of Chancery retained jurisdiction solely for the purpose of deciding the anticipated application of plaintiff’s counsel for an award of attorneys’ fees and reimbursement of expenses in connection with the corrective actions. The Company subsequently agreed to pay $350,000 to plaintiff’s counsel for attorneys’ fees and expenses (the “Mootness Fee”) in full satisfaction of the claim for attorneys’ fees and expenses in the Action. The Company believes resolving Plaintiff’s Fee Application through payment of the Mootness Fee is in the best interest of the Company as it avoids the cost and distraction of litigation and the Mootness Fee is lower than fees awarded in similar circumstances. On March 27, 2023, the Court of Chancery entered an order closing the matter subject to the Company issuing this disclosure. The Court of Chancery has not been asked to review, and did not pass judgment on, the payment of the attorneys’ fees and expenses or their reasonableness.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: April 3, 2023
| EXELA TECHNOLOGIES, INC. | ||
| By: | /s/ Erik Mengwall | |
| Name: Erik Mengwall | ||
| Title: Secretary | ||
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