Atlas Energy Solutions $17M Class Action Settlement

Investors who held Atlas Energy Solutions Inc. Class A common stock on Oct. 2, 2023, and whose shares the company exchanged for New Atlas HoldCo Inc. Class A common stock in the company's reorganization may be eligible to receive a cash payment from a class action settlement.

Atlas Energy Solutions Inc. and its insurers will pay $17 million on behalf of the defendants to settle a class action lawsuit alleging certain directors and controlling stockholders breached their fiduciary duties in connection with the reorganization. The lawsuit claimed the defendants used the reorganization to lower their own personal tax liabilities.

Who are the class members?

The settlement class includes all record holders and beneficial owners of Atlas Energy Solutions Inc. Class A common stock as of the closing of the reorganization on Oct. 2, 2023, whose shares the company exchanged for New Atlas Class A common stock.

Additional details

• Both individuals and entities can be class members.
• The class includes successors and assigns of eligible holders.
• Investors who bought shares on or before Oct. 2, 2023, that had not settled by the closing are class members for those shares while investors who sold those shares on or before that date are not.
• The class is a non-opt-out class under Delaware Court of Chancery rules 23(a), 23(b)(1) and 23(b)(2), meaning class members cannot exclude themselves from the settlement.

How much can class members get?

The total settlement fund is $17,000,000. The amount each class member receives depends on several factors:

• The number of eligible shares held at the closing of the reorganization on Oct. 2, 2023
• The total number of eligible shares in the class
• The amount of the net settlement fund after court-approved deductions

The settlement administrator will distribute payments on a pro rata basis according to the court-approved plan of allocation:

• Each class member's payment equals the number of eligible shares they held at closing times the per-share recovery.
• The per-share recovery is the net settlement fund divided by the total number of eligible shares.
• For shares held through a broker, the settlement administrator will distribute payments to Depository Trust & Clearing Corp. participants who will then deposit payments into class members' brokerage accounts.
• For shares held of record outside DTCC  the settlement administrator will distribute payments directly to the record owner.

No claim form needed to receive payment

Class members do not need to submit a claim form to receive payment. The settlement administrator will distribute payments through the same accounts through which class members received their New Atlas Class A common stock in the reorganization.

Settlement administrator's mailing address: Atlas Stockholder Class Action Litigation, c/o Kroll Settlement Administration LLC, P.O. Box 225391, New York, NY 10150-5391

$17 million settlement fund

The $17,000,000 settlement fund includes:

• Settlement administration costs: Up to $250,000
• Attorneys' fees and expenses: Up to $4,250,000
• Service award to plaintiff: Up to $2,500
• Payments to eligible class members: Remainder of the fund

Important dates

• Fairness hearing: Dec. 18, 2026

When is the Atlas stockholder class action settlement payout date?

The settlement administrator will issue payments to eligible class members after the court resolves any appeals and grants final approval of the settlement.

Why did this class action settlement happen?

The class action lawsuit alleged certain Atlas directors and controlling stockholders breached their fiduciary duties by pushing the reorganization through an unfair process designed to reduce their personal tax liabilities. The plaintiff also claimed the one-for-one exchange ratio was unfair to Class A stockholders and that the reorganization cost the company future tax benefits.

The defendants denied all allegations of wrongdoing but agreed to settle to eliminate the uncertainty, risk, burden and expense of further litigation.

Sources

1. Class notice
2. Settlement agreement
3. Settlement FAQ