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CASA GRANDE — Lucid Motors and an investment company designed to eventually take Lucid stock public are facing a number of lawsuits.

Winston Cooks LLC in conjunction with the Beeman Law Firm have filed a proposed securities class action lawsuit against special purpose acquisition company Churchill Capital Corporation IV, Lucid Motors, Michael Klein from Churchill Capital, Jay Faragin and Peter Rawlinson, the CEO of Lucid.

The law firms join at least six other law firms that have filed class action suits against Churchill Capital and Lucid in the last few months for similar reasons, according to Wccftech.com. The other six law firms are Labaton Sucharow, Frank R. Cruz, Rosen Law, Thornton Law, Bronston Gewirtz & Grossman and Glancy Prongay & Murray, according to Wccftech.com.

All of the law firms appear to be seeking investors who may have lost money after purchasing stock in Churchill in anticipation of Churchill purchasing and merging with Lucid and making a lot of money on the thousands of cars Lucid was expected to manufacture so far this year.

Although Lucid has announced a series of delays in selling cars, the latest until later this year, the company has continued hiring and is proceeding toward an expansion of its plant on the west side of Casa Grande. The company did not respond to a request for comment.

The law firms state that before Churchill purchased a large share of and merged with Lucid, Rawlinson made several claims to the media and in public that Lucid would be rolling thousands of its electric luxury Lucid Air sedans off the assembly line by the spring of 2021.

“This lawsuit addresses that investors were induced to purchase Churchill stock by (the) Lucid CEO’s statements that this year the company would be manufacturing thousands of Lucid Air cars at their brand new Casa Grande facility,” Lee Winston from Winston Cooks stated in an email to PinalCentral. “Those types of statements caused the stock price to rise ahead of the proposed de-(special purpose acquisition company) announcement.”

“Immediately following the de-SPAC announcement, Lucid reported that its premerger production schedule was wildly inaccurate,” Winston stated. “Without thousands of cars being produced this year and the resulting revenue loss from that production, hundreds of millions of dollars, the stock price collapsed and investors lost money.”

The merger between Churchill and Lucid was announced in February and shares of Churchill were selling at around $58 when the stock market closed that day. Shortly after the market closed, Bloomberg News reported that Lucid would only be making about 557 vehicles by the fall of 2021 and that an exact delivery date for the vehicles had not been set. The next day the price of Churchill shares fell to around $35.

Investing in a SPAC should not be any more risky than investing in any other initial public stock offering by a company, and investors are entitled to the same protections from mis-statements that the initial public offering process offers, Winston stated.

A SPAC (special purpose acquisition company) is a type of investment vehicle that’s become very popular in the last few years, according to Investopedia.com. A SPAC is usually used to raise money from investors to buy another company and then take on that company’s name. The SPAC is usually created as a publicly traded company. It can be used to make a private business’s stock available to public investors without the private business having to go through the entire initial public offering process. Also, lawsuits against SPACs have become more common.

SPACs are also known as “blank check companies’’ because investors don’t really know the exact company the SPAC plans to purchase, according to Investopedia. The creators of a SPAC may or may not have a specific business or industry in mind when they start the SPAC.

If they do have a specific business in mind they usually keep that information secret until after they purchase the business in order to avoid having to disclose a lot of information when they start the process to put the business’s stock on a public stock exchange through an initial public offering, according to Investopedia.

However, investors can guess what industry or business the SPAC might be looking to purchase because the creators of SPACs usually have an expertise in certain kinds of businesses or industries, according to Investopedia.

The money investors put into a SPAC is held in an interest-bearing trust fund until the purchase of the company is complete or until the SPAC is liquidated, according to Investopedia. A SPAC has two years to complete the purchase of a business. If it does not complete the purchase it must be liquidated and the money must be returned to investors.

However, sometimes investors do not get all of their money back, especially in cases like the one between Churchill and Lucid, Winston stated.

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Suzanne Adams-Ockrassa is a reporter covering the city of Casa Grande and the surrounding area, as well as Central Arizona College. She can be reached at sadams@pinalcentral.com.