RIV Capital and Hawthorne settle disputes with JW Asset Management over Etain acquisition

LOS ANGELES–RIV Capital Inc. has reached a settlement with JW Asset Management LLC (JWAM) over a dispute related to its acquisition of New York-based medical cannabis operator Etain. JWAM had raised concerns over the purchase price paid by RIV Capital for Etain. As part of the settlement, RIV Capital has repurchased and cancelled all RIV Capital Class A common shares owned or controlled by JWAM and its affiliates, totaling 33,733,334 shares, for $19.6 million. RIV Capital also reimbursed JWAM for legal expenses incurred in the matter, amounting to $375,000.

JWAM had sought a remedy requiring the repurchase of JWAM shares by RIV Capital at $1.22 per share, which works out to $0.58 per share. RIV Capital funded the settlement with cash on hand. The settlement also led to JWAM and its affiliated funds withdrawing their requisition for a special meeting of the company’s shareholders, which was scheduled for June 6 and will now be canceled.

RIV Capital’s board of directors, on the recommendation of the Conflicts Review Committee, which is composed entirely of independent directors, determined that the settlement was in the best interests of the company. RIV Capital’s CEO, Mark Sims, expressed satisfaction with the outcome and said that it enabled both parties to move forward positively.

Meanwhile, The Hawthorne Collective Inc., owned by Scott’s Miracle-Gro, also settled a dispute with JWAM and Jason Wild. As part of the settlement, JWAM and Wild have agreed not to take any action that would interfere with The Hawthorne Collective’s agreements with the company or any rights set forth in those agreements.

(This information is primarily sourced from Reportlinker.  Highly Capitalized has neither approved nor disapproved the contents of this news release. Read our Disclaimer here).