As I noted in my recent round-up of D&O insurance issues, one of the consequences of the end of the SPAC IPO boom is that many of the SPACs from the IPO classes of 2020 and 2021 have given up trying to find a merger target and instead have opted to liquidate – which raises the question whether liquidation could lead to litigation. On the one hand, where’s the harm, since the investors get their money back. On the other hand, in our litigious society, litigation often follows after disappointed expectations. A December 30, 2022, lawsuit brought by SPAC investors against the SPAC, its sponsors, and its directors and officers, may provide an example of how litigation can arise in the wake of a SPAC liquidation.
Continue Reading Liquidating SPAC Hit With Suit Over Proposed Asset Distribution
Businesses these days face a wide variety of headwinds – rising interest rates, economic inflation, supply chain and labor supply disruptions, war in Ukraine, even continued disruptions from COVID – that are interfering with business operations and affecting financial performance. In some instances, these macroeconomic factors are translating into securities litigation. In the latest example of this phenomenon, a plaintiff shareholder has sued video display systems company Daktronics following the company’s announcement that supply chain disruptions, labor shortages, and shutdowns in China caused a decline in the company’s sales, which led to a later announcement of a “substantial doubt” of the company’s ability to continue as a going concern. The December 21, 2022, complaint can be found 
In a few days, when I work up my summary of the year’s events in the world of D&O, one of the stories I will be covering will be the volume of SPAC-related securities litigation during the year. The SPAC-related litigation represents a significant part of the year’s securities class action lawsuit filings. The latest example of this phenomenon is the lawsuit filed late last week against residential home improvement financing platform Sunlight Financial Holdings, Inc., which became a public company through a July 2021 merger with a SPAC. The new lawsuit is in many ways representative of the kinds of SPAC-related lawsuits filed this year. A copy of the complaint in the new lawsuit can be found 
Since the initial coronavirus outbreak in the U.S. in March 2020, plaintiffs’ lawyers have filed a host of securities class action lawsuits against companies raising a variety of COVID-19-related allegations. Many of these cases have faced significant hurdles at the initial pleading stage, and in a number of cases the dismissal motions have been granted. The one categorical exception to these dismissal motion generalizations seems to be cases involving vaccine development companies. Two rulings in the past week seem to corroborate both of these observations. First, in a December 9, 2022 ruling in the securities suit pending against the diagnostic testing company Talis Biomedical, the court granted the defendants’ motion to dismiss (albeit with leave to amend). However, in a December 12, 2022 ruling in the securities case against the vaccine development company Novavax, the court denied the defendants’ dismissal motion in significant part. The rulings in these two cases are discussed below.
On December 13, 2022, the U.S. Supreme Court granted the petition of Slack Technologies to have the court take up the question of the plaintiff’s standing to pursue ’33 Act liability claims against the company. The standing question arises because the plaintiff bought his Slack shares in connection with the June 2019 transaction in which Slack went public through a direct listing rather than through a traditional IPO. Though the standing questions arises in the relatively narrow context of the company’s direct listing, the standing questions at issue potentially could affect ’33 Act liability claims in other contexts as well. A copy of the U.S. Supreme Court’s December 13, 2022 order in the Slack case can be found 
As a result of a host of recent developments – including the War in Ukraine, trade tensions with China, and growing issues involving digital assets – several long-standing regulatory regimes have become increasingly important for companies and their executives. These regulatory regimes include U.S. sanctions, export controls, anti-money laundering (AML) and anti-bribery and corruption laws. According to a recent memo from the Skadden law firm entitled “Why Directors and Executives Need to Pay Attention to Sanctions, Money Laundering, and Export Rules” (
In recent posts on this site (for example, 
