Item 8.01 Other Events
Although 1847 Holdings LLC (the "Company") is not a party to any of the lawsuits
described below, it is filing this current report on Form 8-K to provide
disclosure that it believes is material to its shareholders with respect to a
stockholder class action lawsuit filed against Polished.com Inc. (formerly, 1847
Goedeker Inc.), a former subsidiary of the Company ("Polished"), the
underwriters of Polished's initial public offering, and certain of its directors
and officers, including Ellery W. Roberts and Robert D. Barry, who are also
officers and/or directors of the Company.
On October 31, 2022, a class of shareholders of Polished filed suit in the
Federal District Court for the Eastern District of New York (Federal Civil Case
Number: 1:22-CV-06606-NGG-VMS (Class Action Lawsuit)) against Polished, the
underwriters of Polished's initial public offering, and certain of its directors
and officers, including Ellery W. Roberts and Robert D. Barry (Messrs. Roberts
and Barry, the "Director Defendants"). The complaint asserts the following
causes of action against the directors and officers: (i) violation of Section 11
of the Securities Act; (ii) violation of Section 12(a)(2) of the Securities Act;
(iii) violation of Section 15 of the Securities Act; (iv) violation of Section
10(b) of the Exchange Act and Rule 10b-5 (but not against the Director
Defendants); and (v) violation of Section 20(a) of the Exchange Act (but not
against the Director Defendants).
The complaint alleges that various SEC filings were negligently prepared and
contained misstatements and omissions of material facts related to the Company's
internal controls. In particular, the complaint alleges the Polished
registration statement for its initial public offering, the registration
statement for Polished's secondary pubic offering, and multiple Quarterly
Reports on Forms 10-Q contained misrepresentations by failing to raise concerns
about internal controls despite knowing that the internal controls were
inadequate. The complaint alleges that in making these filings, the defendants
violated their fiduciary duty to provide adequate disclosures about adverse
conditions, risk and uncertainties.
On February 13, 2023, another shareholder derivative lawsuit was filed in the
Federal District Court for the Eastern District of New York naming, among
others, Ellery W. Roberts, Clark R. Crosnoe, Glyn C. Milburn, and 1847 Partners,
LLC for aiding and abetting the breach of fiduciary duty, as defendants making
similar allegations as the lawsuit described above. These claims typically
follow the class action complaint and pursue a settlement if the class action
claims survive a motion to dismiss. Accordingly, the derivative claims have been
stayed.
- 1 -
© Edgar Online, source Glimpses