SPAC Mergers Challenged for an Alleged Statutory Foot-Fault

November 17, 2021

Publication| Corporate & Chancery Litigation| Corporate Transactions| Corporate Governance| Mergers & Acquisitions| Special Committees & Investigations

Stockholder-plaintiffs have filed a number of complaints in the Delaware Court of Chancery challenging at least five mergers involving Delaware special purpose acquisition companies (SPACs) in the last four months alleging that the SPAC’s failure to solicit a “class vote” of the SPAC’s Class A Common stockholders in connection with certain amendments to the SPAC’s certificate of incorporation violates the requirements of Section 242(b)(2) of the Delaware General Corporation Law (the DGCL). This article explains the technical issue that is the focus of this recent litigation and the various ways deal counsel can address or avoid it.

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