In Solak v. Mountain Crest Capital, the Delaware Court of Chancery found that a stockholder plaintiff pleaded a viable breach of fiduciary duty claim based on an alleged failure of the board of directors of a SPAC to disclose material information – specifically, the value of the company in terms of cash per share – prior to the vote on the merger. This is the first time the court has permitted claims based on the failure of a SPAC to disclose the net cash value of company shares to survive a motion to dismiss. The court’s opinion emphasized that this case is a notable example of how, despite a contracted SPAC market, SPAC lawsuits remain “ubiquitous in Delaware,” and likened the SPAC docket to the digestive tract of an adult anaconda.
Source: Solak v. Mountain Crest Capital: fiduciary duties claims abound for SPAC sponsors and directors