In my recent survey of key 2020 D&O developments I highlighted the surge of SPAC IPOs last year and conjectured about the possible increase in the number of D&O claims that might arise following the transactions in which private companies merge into the public traded SPACs ( the so-called de-SPAC transaction). A securities suit filing this week demonstrates how these claims might well arise and does suggest we could indeed be in for an influx of securities suits and other D&O claims filed following de-SPAC transactions.
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The Top Ten D&O Stories of 2020
The directors’ and officers’ liability environment is always changing, but 2020 was a particularly eventful year, with important consequences for the D&O insurance marketplace. The past year’s many developments also have significant implications for what may lie ahead in 2021 – and possibly for years to come. I have set out below the Top Ten D&O Stories of 2020, with a focus on the future implications. Please note that on Wednesday, January 13, 2021 at 11:00 AM EST, my colleague Marissa Streckfus and I will be conducting a free, hour-long webinar in which we will discuss The Top Ten D&O Stories of 2020. Registration for the webinar can be found here. I hope you will please join us for the webinar.
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SPAC-Acquired Company Hit with Post-Acquisition Securities Suit
As I noted in a recent post, one of the most distinctive phenomena in the U.S. financial markets this year has been the tremendous amount of IPO activity involving Special Purpose Acquisition Companies (SPACs). According to SPACInsider (here), there have been 243 SPAC IPOs so far in 2020 (as of December 22, 2020), raising total gross proceeds of over $81.3 billion. As I also noted in my prior post, lawsuits relating to SPACs are starting to accumulate. In the latest example of a securities suit relating to a SPAC transaction, a plaintiff shareholder has filed a securities class action against the surviving company following a SPACs acquisition of a target company; the complaint in the lawsuit names as defendants not only the CEO of the surviving company, but also the former president of the SPAC. As discussed below, this new lawsuit may have implications for possible future SPAC-related securities litigation in 2021, and possibly even beyond.
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Guest Post: Mind the (SPAC) Gap
As I have noted in prior posts (most recently here), there has been a wave of Special Purpose Acquisition Company (SPAC) offerings this year. And as I have also noted, with all of the SPAC offerings have come problems and concerns. As discussed in the following guest post from Carrie O’Neil, Doru Gavril, and Boris Feldman, the D&O insurance marketplace has struggled to respond to these developments, and a number of different approaches to SPAC transactions have emerged. Carrie is a Senior Vice President at CAC Specialty and serves as a product development leader and claims advocate within its Legal and Claims Practice. Doru is a partner at the Freshfields law firm. Boris is a partner and head of the U.S. Technology practice at Freshfields. A version of this article was published on A Fresh Take, Freshfields’ blog on M&A, litigation, and corporate governance. The article also appeared on the CAC Specialty blog, CACConnect, here. I would like to thank the authors for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.
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Rain on the SPAC Parade?
2020 has been called “the year of the SPAC.” (2020 has been called a lot of other things as well, but for purposes of this blog post, I am going to focus on the SPAC-related issues.) The reason for the fanfare about Special Purpose Acquisition Companies (SPACs) is that there has been a wave of SPAC offerings this year, raising tens of billions of dollars of capital. While the rush to conduct SPAC offerings has at times started to feel like a stampede, there are in fact questions being raised about at least some SPAC transactions. As discussed below, there has been a series of recent lawsuits involving SPACs, and regulators have made it clear that they are concerned about some features of some SPAC transactions. These recent developments suggest that some trouble could be brewing in SPAC-Land.
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