It’s one thing to negotiate with a target company, but quite another when you have to negotiate with your own team.  For Anzu Special Acquisition Corp. I (NASDAQ:ANZU), which filed an 8-K this afternoon, it appears that internal disagreements in regards to strategy have resulted in the loss of their CFO, General Counsel & Secretary, Chairman of the Board, and a Director, all of which have resigned.

As to who is left on the ANZU team, Dr. Whitney Haring-Smith, the CEO and director of ANZU, will continue to lead the team along with directors Priya Cherian Huskins and Susan J. Kantor.

Nonetheless, it’s important to note that Dr. Haring-Smith’s firm, Anzu Partners (for which the SPAC is named), focuses on early venture stage and growth companies. Today’s filing noted in the resignations that at issue was the targets the company was evaluating as well as the current market conditions.

But to give better context, let’s review the timeline of resignations.

First, on July 29, John W. Joy, the CFO, resigned with the reason given as “changes in direction for the Company, including in the targets that the Company is evaluating.”

On the same day, July 29, Peter J. Ganz, the General Counsel and Corporate Secretary of ANZU, also resigned and also noted “changes in direction for the Company, including in the targets that the Company is evaluating.”  However, cost cutting by the Company was also cited.

Then Teresa A. Harris, a Director, notified the company of her resignation, also on July 29.

And finally, on July 31, William Wulfsohn, the Chairman of the Board, gave his notice of resignation as well.

Nonetheless, both Teresa Harris and Williamn Wulfsohn stated that their resignations were a result of:

“…their disagreement with Company decisions and process leading to the resignations of Mr. Joy and Mr. Ganz and the resulting loss to the Company of the expertise of these two key executives; their disagreement with the nature of and approach to potential acquisition candidates the Company was considering in the context of changes in market conditions (both generally and for special purpose acquisition companies) and the approaching deadline for completing a business combination; and their disagreement with the Company’s continued pursuit of a specific business combination transaction.”

Typically we’re not given much information when an executive or board member leaves a company. For the most part, these usually say they are due to “personal reasons” or to “pursue other opportunities”. The ANZU resignations on the other hand give quite a bit of information and are pretty strongly worded.

Clearly, there is a disagreement regarding the “continued pursuit” of a specific transaction that the “resignees” do not want to pursue, nor think viable in today’s macroeconomic climate.  Furthermore, they note the “approaching completion deadline” implying that they’d rather be looking elsewhere instead of trying to run up a down escalator with the clock ticking.

ANZU still has seven months left until its March 4, 2023 deadline, but as we’ve seen, time elapses rapidly in SPACland. In fact, most teams will tell you there is an element of Einsteinian time distortion when trying to complete a SPAC. I.e., time goes twice as fast the closer you get to your deadline, while simultaneously slowing down to half speed at the SEC. These are the laws of SPAC physics.

In the meantime, ANZU is now not in compliance with Nasdaq’s listing standards since it requires the Audit Committee to be composed of at least three independent directors. However, ANZU is entitled to a cure period to regain compliance. As a result we should see further 8-Ks announcing an additional director or directors in the coming weeks.