SPACInsider Logo
E. Merge and Go Acquisition Corp. Hit with Lawsuits Too
by Kristi Marvin on 2021-08-24 at 12:59am

Former SEC Commissioner and Yale Law Professor Try to Outflank SPACs

Last week, Pershing Square Tontine Holdings (NYSE: PSTH) was hit with a lawsuit from former SEC commissioner Robert Jackson and Yale law professor John Morley, claiming that PSTH violated the Investment Company Act of 1940.  To which, Bill Ackman punched back by posting a letter to the PSTH website disputing the claims as well as proposing a solution for investors via his SPARC structure.

However, it appears that Jackson and Morley have decided to counter-punch by filing two more suits against GO Acquisition Corp. (NYSE: GOAC) and E.Merge Technology Acquisition Corp. (Nasdaq: ETAC), both claiming once again that the SPACs violated the Investment Company Act of 1940.  This is despite law professors stating in the media that they thought this was an unlikely winnable strategy.

Interestingly, of the current 438 SPACs currently out searching for targets that they could have chosen to sue, Jackson and Morley have selected two more SPACs for litigation that have less than a year left on their clock. Specifically, 11.4 and 11.3 months, for GOAC and ETAC, respectively.

Furthermore, GOAC was underwritten by Credit Suisse, Citigroup and Morgan Stanley as joint-bookrunners, while ETAC was underwritten by Cantor Fitzgerald and Mizuho. All five of these banks (to a lesser extent Mizuho, being newer to the SPAC space) are powerhouses in underwriting SPAC deals.

If you’re going to pile on SPAC suits, these seem awfully convenient targets with convenient timelines, particularly if the strategy is to tie up higher-profile deals (with leading underwriters) in the court system. However, the additional suits do indicate that Jackson and Morley are not going to throw all their cards in with just Ackman.  After all, Ackman is an activist investor and enjoys a good battle.  Plus, he’s proven himself willing to fight endlessly to prove a point (see: Herbalife). Instead, the additional lawsuits appear to be a means to hedge their bets. You just need to win one case.

The question is, how will SPACs fight back?

 

 

Recent Posts
by Marlena Haddad on 2022-12-06 at 5:43pm

  Below is a daily summary of links to the latest SPAC news and rumors gathered across the web.  Latest SPAC Liquidations: Broadscale, Revolution Healthcare, Research Alliance II, and Kairos Broadscale Acquisition Corp. to Liquidate  On December 6, 2022, stockholders of Broadscale Acquisition Corp. (NASDAQ:SCLE) approved amendments to change the termination date from February 17,...

by Nicholas Alan Clayton on 2022-12-06 at 1:02pm

Roth CH Acquisition IV Co. (NASDAQ:ROCG) has entered into a definitive agreement to combine with renewable energy equipment-maker Tigo for pre-money equity consideration of $600 million. Campbell, California-based Tigo manufacturers components that optimize and enhance safety for solar panel arrays, with installations on seven continents The combined company is expected to trade on the Nasdaq...

by Marlena Haddad on 2022-12-06 at 12:55am

  Below is a daily summary of links to the latest SPAC news and rumors gathered across the web.  Latest SPAC News: Portugal real estate developer Vic Properties in merger talks with BurTech Caner-Led Aggregate Is Said to Discuss Vic Properties SPAC Deal Aggregate Holdings SA is in talks to take its Portuguese unit Vic...

by Marlena Haddad on 2022-12-06 at 11:11am

SportsMap Tech Acquisition Corp. (NASDAQ:SMAP) has entered into a definitive agreement to combine with intelligent thermal imaging provider Infrared Cameras Holdings (ICI) at a pre-money equity valuation of $100 million. Beaumont, Texas-based Infrared Cameras Holdings develops and manufactures infrared-sensor systems, offering handheld and fixed hardware. The combined company is expected to trade on the Nasdaq once the...

by Nicholas Alan Clayton on 2022-12-06 at 10:24am

Ares Acquisition Corporation (NYSE:AAC) has entered into a definitive agreement to combine with nuclear power company X-energy at an enterprise value of $2.2 billion. Rockville, Maryland-based X-energy has developed small modular nuclear reactor technology designed to provide nuclear plants for projects ranging from individual industrial sites to regional utilities. The combined company is expected to...

Privacy Policy|Terms Of Use
Copyright © 2022 SPACInsider, Inc. All Rights Reserved