The Delaware Court of Chancery yesterday denied a motion to dismiss a class action alleging that the directors and sponsor of a special-purpose acquisition company (a “SPAC”) breached their fiduciary duties by disloyally depriving the SPAC's public stockholders of information material to their decision whether to redeem their stock before the SPAC merged with a private company in a “de-spac” transaction. The decision in Delman v. GigAcquisitions3, LLC (Del. Ch. Jan. 4, 2023), adds to the growing body of cases analyzing potential conflicts in SPAC transactions and applying the rigorous “entire fairness” standard of review.
Source: Delaware Chancery Court Denies Dismissal of Challenge to SPAC Merger Disclosures