Changyou is an online game company primarily operating in China. It had two classes of stock, with Class A shares entitled to one vote per share, and Class B shares entitled to ten votes per share. In 2009, Changyou conducted a public offering of ADSs in the United States and each ADS represented two class A shares. Sohu.com Limited (Sohu) was Changyou’s controlling shareholder throughout the Class Period. In January 2020, Changyou, Sohu Game (a subsidiary of Sohu), and Changyou Merger Co. Limited, agreed to execute a going private transaction (the Merger). The transaction was structured as a “short form” merger, meaning that it did not require a vote of public shareholders.
In the operative Amended Complaint, filed on October 8, 2021, Lead Plaintiff alleged, among other things, that the Rule 13e-3 Transaction Statement filed with the U.S. Securities and Exchange Commission (SEC) and sent to ADS holders in connection with the transaction contained allegedly false and misleading statements regarding the unavailability of “dissenters’” or “appraisal” rights, and other potential rights, for dissenting shareholders in short-form mergers under the Cayman Islands Company Law. Lead Plaintiff alleged that during the Class Period, Defendants’ alleged wrongdoing artificially deflated the prices of Changyou ADSs, allegedly mislead sellers of Changyou ADSs concerning their rights and, as a result of their sales (including tendering) of Changyou ADSs, members of the class allegedly suffered damages under the federal securities laws.
On October 29, 2021, Settling Defendants served a motion to dismiss the Complaint. In October 2021, the Parties began discussing the possibility of reaching a negotiated settlement of the Action, ultimately reaching an agreement in principle to settle later in the fall. The Stipulation (together with the exhibits) reflects the final and binding agreement between the Parties.
The case is In re Changyou.com Limited Securities Litigation, No. 1:21-cv-07858-GHW. The Action is assigned to the Honorable Gregory H. Woods, United States District Court Judge. The Settling Defendants are Changyou.com Limited, Sohu.com Limited, Sohu.com (Game) Limited, Xiao Chen, and Joanna Lv.
Labaton Keller Sucharow LLP is lead counsel and represents Lead Plaintiff ODS Capital LLC.
Submit Claim Form
If you (a) held Changyou.com Limited (Changyou or the Company) American Depositary Shares (ADS) on April 23, 2020, and/or (b) sold (including by tendering) Changyou ADSs during the period from February 19, 2020, through April 23, 2020, inclusive (the Class Period), and were allegedly damaged, you may be entitled to a payment from a class action settlement. To be eligible for a payment, you must submit a Claim Form to the Claims Administrator by January 23, 2023.
Settlement Hearing
The Court held a Settlement Hearing on January 27, 2023 remotely via an operator assisted conference call and approved the Settlement and the Plan of Allocation and awarded attorneys’ fees and expenses.
If you have questions about the Settlement, please contact Labaton Keller Sucharow at settlementquestions@labaton.com or 1-888-219-6877, or contact the Claims Administrator, at (866) 274-4004.
