Cooley Sued for ‘Tricking’ Biote Founder in SPAC Deal Gone South

Law firm Cooley is being sued over a blank-check deal that a family trust says diluted its holdings in a medical company in favor of corporate insiders.

The lawsuit, filed in Delaware Chancery Court, relates to the 2022 merger of hormone therapy company Biote Holdings with Haymaker Acquisition III, Bloomberg reports. Haymaker raised more than $315 million to pursue a merger.

The suit alleges Cooley lawyers and other defendants, including the SPAC's founders and company insiders, failed to disclose material aspects of the deal as it deteriorated. The law firm conspired in “tricking” the company's founder to waive a clause that allowed him to scrap the deal if it didn't deliver enough cash to the company, according to the complaint.

A trust representing the ex-wife of Biote's founder, Dr. Gary Donovitz, filed the suit. Donovitz in April settled a similar dispute with Biote agreeing to purchase his shares for roughly $77 million. Marci Donovitz, his ex-wife, says in the new suit that the trust owned 45% of the company prior to the SPAC, which diluted the ownership to 34.5%. Read more.

Source: Cooley Sued for ‘Tricking' Biote Founder in SPAC Deal Gone South