Liquidating SPAC Hit With Suit Over Proposed Asset Distribution | The D&O Diary

As I noted in my recent round-up of D&O insurance issues, one of the consequences of the end of the SPAC IPO boom is that many of the SPACs from the IPO classes of 2020 and 2021 have given up trying to find a merger target and instead have opted to liquidate – which raises the question whether liquidation could lead to litigation. On the one hand, where’s the harm, since the investors get their money back. On the other hand, in our litigious society, litigation often follows after disappointed expectations. A December 30, 2022, lawsuit brought by SPAC investors against the SPAC, its sponsors, and its directors and officers, may provide an example of how litigation can arise in the wake of a SPAC liquidation.

Source: Liquidating SPAC Hit With Suit Over Proposed Asset Distribution | The D&O Diary