News10NBC Investigates: Law firms question Li-Cycle executives

Construction halted for $700 million expansion on Li-Cycle North American hub in Rochester

Construction halted for $700 million expansion on Li-Cycle North American hub in Rochester

ROCHESTER, N.Y. – The future of Li-Cycle’s North American hub in Rochester remains unclear. 

When the company suddenly halted construction on its $700 million expansion at the Eastman Business Park on Monday, it left 200-plus local constriction workers out of a job. Li-Cycle’s stock price also plummeted triggering two law firms that represent investors to launch investigations of their own. 

Li-Cycle suspended all work at the 65-acre site in Rochester on Monday citing increasing construction costs. The move came as a surprise to just about everyone. Rep. Joe Morelle, D-Rochester; Democratic Monroe County Executive Adam Bello; and Senate Majority Leader Chuck Schumer, D-N.Y. all told News10NBC they had no advance warning of any issues with the company or project.    

Even the tradespeople working on the job site were shocked to show up on Monday morning and be turned away.

“I’ve overseen a lot of large projects here in Rochester and this is the first time it came to an abrupt halt like this,” said Grant Malone, the president of the Rochester Building & Construction Trades Council.

Five days later, the fallout continues. The lithium-ion battery recycling company’s share price was down more than 40 percent from last week’s market close and now two separate law firms are investigating concerns about whether the company or company officers violated federal securities laws and/or engaged in other unlawful business practices. 

Bragar Eagel & Squire, P.C. and Kirby McInerney LLP both say the price of Li-Cycle shares declined by approximately 45.81 percent this week upon news of the work stoppage in Rochester and they are encouraging shareholders who suffered a loss and want to learn their investigations to contact them. 

This isn’t the first time law firms that represent investors have been digging into Li-Cycle. Two others currently have their eye on the company after short seller Blue Orca Capital released a report in 2022 that indicated Li-Cycle is ”near a fatal combination of stock promotion, laughable governance, a broken business hemorrhaging cash and highly questionable Enron-like accounting.”

In response, a spokesman for Li-Cycle tells News10NBC, “We believe these investigations are meritless and baseless. We remain fully committed to Rochester and to the development of the Rochester Hub.”

News10NBC has also uncovered a handful of recent Occupational Safety and Health Administration violations at the Rochester project. Li-Cycle is currently facing nearly $10,000 in fines for violations ranging from not ensuring employees had tight-fitting respirators to not training them on fire extinguishers. The company was also cited for not ensuring frequent inspections of a bridge crane inside one of its buildings and not keeping up with required OSHA paperwork. 

In response to those issues, the Li-Cycle spokesman says, “Li-Cycle prioritizes the safety of workers, contractors, customers, and communities and we take all safety related complaints seriously. Li-Cycle made this a top priority and worked closely and collaboratively with officials during the investigation. Li-Cycle acquired key learnings through this process and we have implemented measures to resolve the complaint. It is important to note that the investigation did not identify any instances of high levels of violations and there were no injuries in relation to the complaint.”