The Law Offices of Frank R. Cruz Announces the Filing of a Securities Class Action on Behalf of Charge Enterprises, Inc. (CRGE, CRGEQ) Investors

LOS ANGELES--(BUSINESS WIRE)--The Law Offices of Frank R. Cruz announces that a class action lawsuit has been filed on behalf of persons and entities that purchased or otherwise acquired Charge Enterprises, Inc. (“Charge” or the “Company”) (NASDAQ: CRGE; OTC: CRGEQ) common stock between December 15, 2021 and February 28, 2024, inclusive (the “Class Period”). Charge investors have until July 29, 2024 to file a lead plaintiff motion.

If you are a shareholder who suffered a loss, click here to participate.

On November 21, 2023, Charge disclosed that it had received a default notice from its senior lender, Arena Investors, LP (“Arena”), stating that its prior belief that it had “approximately $9.9 million of Company assets . . . in the form of cash, cash equivalents, marketable securities or similar readily liquid assets” was false; instead, these funds had been invested in KORR Value and were thus “not immediately able to be liquidated or readily accessible.” Charge warned that if it “[continued] not to have sufficient liquidity to pay the principal and interest on the [Arena] Notes. . . these circumstances could result in a default under other of the Company’s debt instruments and agreements that contain cross-default provisions” which would “have a material adverse effect on the Company’s liquidity, financial condition and results of operations, and may render the Company insolvent and unable to sustain its operations and continue as a going concern.”

Then, on December 6, 2023, Charge revealed that it had received additional default notices from Arena and that the Company would be ceasing the operations of certain of its telecommunications subsidiaries in an effort to preserve liquidity.

Then, on January 25, 2024, Charge disclosed that it had received a foreclosure notice, and that, to satisfy its outstanding debt, Arena would be holding an auction liquidate 100 percent of the equity interests in certain Charge subsidiaries.

Then, on February 28, 2024, Charge announced that it had entered into a Restructuring Support Agreement with two affiliates of Arena. The following day, on February 9, 2024, NASDAQ suspending trading of Charge common stock.

Then, on March 7, 2024, Charge filed its voluntary petition for bankruptcy.

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) the Company was invested in an illiquid limited partnership Interest; (2) the Company’s investments with KORR Acquisitions were “critical” to Charge’s liquidity, and the failure to return them proximately caused a default on the Arena Notes; (3) the Company was facing a serious liquidity crisis and risk of default under the Arena Notes on account of Orr and KORR Acquisitions’ failure to return the Company funds; (4) Charge’s internal disclosure controls and procedures were not effective during the Class Period; and (5) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times. Follow us for updates on Twitter: twitter.com/FRC_LAW.

If you purchased Charge common stock during the Class Period, you may move the Court no later than July 29, 2024 to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you purchased Charge common stock, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 2121 Avenue of the Stars, Suite 800, Los Angeles, California 90067 at 310-914-5007, by email to [e-mail], or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.

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