Capital Markets & Securities Law Watch

In In re Multiplan Corp. Stockholder Litigation, C.A. No. 2021-0300-LWW (Del. Ch. Jan. 3, 2021), Vice Chancellor Lori Will of the Delaware Court of Chancery issued the first major decision applying Delaware law to de-SPAC transactions, holding that Delaware’s entire fairness standard of review applies to a de-SPAC transaction challenged on the basis of misleading statements or omissions in the SPAC’s proxy statement. 

A new trend in special purpose acquisition company litigation has emerged: shareholder derivative actions seeking to declare SPACs “investment companies” under the Investment Company Act of 1940. Despite powerful backing, these lawsuits miss the mark.