News & Analysis as of

Motion to Dismiss Special Purpose Acquisition Companies (SPACs)

A&O Shearman

Northern District Of California Dismisses Class Action Against Social Media Company

A&O Shearman on

On May 19, 2025, Judge Edward J. Davila of the United States District Court for the Northern District of California dismissed without prejudice a proposed securities fraud class action asserting claims against a social...more

Hogan Lovells

Solak v. Mountain Crest Capital: fiduciary duties claims abound for SPAC sponsors and directors

Hogan Lovells on

In Solak v. Mountain Crest Capital, the Delaware Court of Chancery found that a stockholder plaintiff pleaded a viable breach of fiduciary duty claim based on an alleged failure of the board of directors of a SPAC to disclose...more

A&O Shearman

Colorado District Court Dismisses Putative Class Action Against Software Company For Failing To Adequately Allege Scienter Or...

A&O Shearman on

On April 4, 2025, Judge Gordon P. Gallagher of the United States District Court for the District of Colorado dismissed with prejudice a putative class action asserting claims under the Securities Act of 1933 and the...more

Morris James LLP

Chancery Finds Sufficiently Pled Fiduciary Duty Claims Relating to De-SPAC Transaction

Morris James LLP on

Solak v. Mountain Crest Capital LLC, et al., C.A. No. 2023-0469-SG (Del. Ch. Oct. 18, 2024) - The Court of Chancery found that the plaintiff stated legally-sufficient claims in connection with a merger transaction against...more

A&O Shearman

Southern District Of New York Grants In Part And Denies In Part Motion To Dismiss Regarding SPAC Acquisition of Online Lottery...

A&O Shearman on

On February 25, 2025, Judge Jennifer L. Rochon of the United States District Court for the Southern District of New York granted in part and denied in part motions to dismiss amended complaints filed in a putative class...more

Hogan Lovells

Delaware Court of Chancery dismisses “De-SPAC” merger claims at motion to dismiss stage

Hogan Lovells on

In In re Hennessy Capital Acquisition Corp. IV Stockholder Litigation, the Delaware Court of Chancery for the first time dismissed breach of fiduciary duty claims against directors involved in a merger with a special purpose...more

A&O Shearman

District Of Arizona Grants Motion To Dismiss Shareholder Derivative Suit Against Residential Property Dealer In Connection With...

A&O Shearman on

On August 14, 2024, Judge Michael T. Liburdi of the United States District Court for the District of Arizona granted with leave to amend a motion to dismiss a shareholder derivative suit brought in the name of the company, a...more

Jones Day

Court of Chancery Grants Rare Motion to Dismiss Suit Governed by Entire Fairness Standard

Jones Day on

The electric vehicle company Canoo went public in a de-SPAC transaction in December 2020. After its stock price fell, a stockholder in the SPAC who chose not to redeem his stock sued the SPAC board and its controller for...more

King & Spalding

Delaware Chancery Court Issues Precedential Decision Dismissing Claims Challenging “De-SPAC” Merger Disclosures

King & Spalding on

The Delaware Court of Chancery’s recent decision in In re Hennessy Capital Acquisition Corp. IV Stockholder Litigation,1 marks the Chancery Court’s first total dismissal of a complaint alleging breaches of fiduciary duties in...more

Proskauer - The Capital Commitment

Ripples Following the SPAC Wave: Litigation and Regulatory Risks

It’s a pattern we often see in boom-and-bust cycles—disputes rising in the period after a wave crests. SPAC deal volume hit an unprecedented high in 2021, but then slowed down in 2022 alongside IPOs. However, the fallout from...more

Skadden, Arps, Slate, Meagher & Flom LLP

In Novel SPAC Ruling, Court Questions Fundamental SPAC Structure Under Delaware Law

With all the SPAC activity and scrutiny over the past several years, it was only a matter of time before the Delaware courts had an opportunity to weigh in on SPAC stockholder litigation. Early last year, in January...more

Proskauer - Corporate Defense and Disputes

Delaware Chancery Court Denies Dismissal of Challenge to SPAC Merger Disclosures

The Delaware Court of Chancery yesterday denied a motion to dismiss a class action alleging that the directors and sponsor of a special-purpose acquisition company (a “SPAC”) breached their fiduciary duties by disloyally...more

Jones Day

Recent Motion-to-Dismiss Decisions Underscore Uncertain Litigation Prospects for SPAC Participants

Jones Day on

The use of SPACs to take companies public increased dramatically in recent years, but many of these new companies performed poorly after entering the public capital markets. This poor performance, often accompanied by...more

Woodruff Sawyer

Another SPAC Lawsuit That Could Have Benefitted from a Reps Policy

Woodruff Sawyer on

SPAC lawsuits are increasing in frequency. There was a big jump in the number of SPAC-related cases from 2020 to 2021. Five new securities class actions were filed against SPACs in just the first two months of 2022. Several...more

White & Case LLP

How to Manage the Risks of SPAC Securities Fraud Actions in 2022

White & Case LLP on

In March 2021, White & Case published a client alert entitled "How SPACs Can Manage the Risks of White Collar Scrutiny." The article discussed the surge in interest and publicity surrounding "SPACs" (Special Purpose...more

Cadwalader, Wickersham & Taft LLP

Delaware Chancery Court Signals Heightened Scrutiny of SPAC Boards and Sponsors

The Delaware Chancery Court has issued a decision with major implications for sponsors and directors of Delaware incorporated special purpose acquisition companies (SPACs).  In re MultiPlan Corp. Stockholders Litigation is a...more

Goodwin

President Biden Issues Sweeping Executive Order on Promoting Competition in the American Economy

Goodwin on

In This Issue. President Joe Biden issued a sweeping executive order aimed at cracking down on anticompetitive practices and reducing consolidation across multiple industry sectors, including financial services; the Federal...more

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