MULN Stock Alert: Mullen Rallies Shareholders to Oppose $3 Million Fee

  • Mullen Automotive (MULN) has objected to paying an attorney award of $3 million.
  • The company has urged its shareholders to object to the award by May 4.
  • MULN stock is down by more than 55% year to date.
MULN stock - MULN Stock Alert: Mullen Rallies Shareholders to Oppose $3 Million Fee

Source: Sam the Leigh /

Last week, it was announced that the attorneys in two putative stockholder class actions against Mullen Automotive (NASDAQ:MULN) had requested $3 million in awards and attorney fees from the company. The class actions stem from a claim that the move to increase authorized shares during the 2022 annual meeting was unauthorized and that the proposal to change Mullen’s state of incorporation to Maryland from Delaware was initiated in order to escape litigation.

Mullen responded to the class action by validating and ratifying its increase in authorized shares through the Delaware Court of Chancery. At the same time, the electric vehicle (EV) company withdrew its proposal to change its state of incorporation.

MULN Stock: Mullen Urges Shareholders to Object to $3 Million Attorney Fee

On Feb. 3, the plaintiffs voluntarily dismissed the class actions. Still, the court retained jurisdiction to decide an attorney award and expense amount for the plaintiff’s counsel. The plaintiffs and their attorneys believe that the class actions led to a validation of shares outstanding, which could lead to future legal protection.

They also believe that Mullen’s withdrawal of its state of incorporation change proposal will help shareholders because Delaware makes it “easier to hold fiduciaries to account for their breaches.” On top of that, Delaware doctrine “rewards litigants who assert meritorious claims with attorneys’ fees commensurate with the benefits achieved by their efforts,” according to the legal brief.

Mullen has responded by stating that it objects to the $3 million award and that it will file a brief in opposition by April 11. In addition, the Court of Chancery has scheduled a hearing related to the award for May 25.

So, how can shareholders of MULN stock help the company? Shareholders are eligible to file a written objection, “together with copies of all other papers and briefs supporting the objection,” with the Register in Chancery on or before May 4.

They can also deliver the objection electronically through email. The objection must state the case name and civil action number, as well as the personal details of the objector and the specific reasons for the objection. Objectors are also eligible to appear at the May 25 hearing if they file a written notice.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines. 

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

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