Late Stage Management Case Update: Court Encourages Mediation as Motion to Dismiss Paused

A recent court development in the litigation involving Late Stage Asset Management LLC and related defendants signals a potential shift away from immediate motion practice and toward early resolution discussions.

During a pre-motion conference held on February 11, 2026, before Judge Kiyo A. Matsumoto of the Eastern District of New York, the Court evaluated the anticipated motions to dismiss filed by various defendants in the action. Based on the discussion, the Court indicated that the plaintiffs’ Second Amended Complaint likely states a viable claim, or, at minimum, could be further amended to do so if necessary.

In light of this, the Court strongly encouraged the parties to pursue mediation or a settlement conference rather than proceed directly into prolonged litigation.

What This Means Procedurally

• The briefing schedule for the anticipated motions to dismiss has been paused indefinitely
• The parties have been directed to meet and confer regarding mediation or settlement
• A joint status letter was required to be filed by February 20, 2026, confirming whether mediation will proceed and identifying availability

This is a notable inflection point in the case. Courts often encourage mediation when they believe continued litigation may be inefficient relative to the potential for negotiated resolution.

Practical Implications for Investors and Observers

At this stage, the case is in a transitional posture. While the litigation remains active, the Court’s directive reflects a preference for exploring settlement before engaging in costly and time-intensive motion practice and discovery.

Importantly, this phase does not create a clear or immediate pathway for additional individual claims or new participant involvement. The matter is being handled within the structure of the existing litigation, and any recovery—if achieved—would likely be determined through that process.

Current Posture: Limited Action Required

Given where the case stands today:

• There is no active claims process open to new participants
• The legal strategy is being shaped within the existing case framework
• Outcomes, if any, will depend on the progress of mediation or subsequent court proceedings

For these reasons, there is presently limited utility in pursuing separate or parallel actions related to this matter.

Looking Ahead

If mediation proceeds, the case could resolve more efficiently than through extended litigation. If not, the matter may return to the motion to dismiss phase, followed by discovery.

We will continue to monitor developments and provide updates as the case evolves.