The public company tax : Why Rocket s shareholder lawsuit is part of the game crainsdetroit.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from crainsdetroit.com Daily Mail and Mail on Sunday newspapers.
Seyfarth Synopsis:
Special Purpose Acquisition Company (“SPAC”) transactions have dramatically increased since the start of 2020, bringing with them risk of securities litigation.
2020 has been characterized as the “Year of the SPAC,” and there is no doubt that SPAC transactions are on the rise.[1] One industry tracker reports that in 2020 there were 248 SPAC initial public offerings (“IPOs”) raising over $83 billion (as compared to 59 SPAC IPOs raising approximately $13.6 billion in 2019).[2] This trend is expected to continue in 2021 with 189 SPAC IPO transactions this year at the time of writing.[3]
We expect this rise in SPAC transactions to be accompanied by the continued filing of securities suits in the coming months and years.[4] Much of the litigation will be no different than typical disclosure-related suits that might follow any public company disclosure, but certain unique aspects of the SPAC structure could create additional litigation risks.
Fertitta blank check flop is test for disgruntled investors lmtonline.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from lmtonline.com Daily Mail and Mail on Sunday newspapers.
Liability for SPAC Flops: Waitr Could Be Test Case for Disgruntled Investor Lawsuits
Waitr Inc. never had the resources of rivals Grubhub Inc. and UberEats. Yet in November 2018 the online food ordering and delivery business went public through a merger with blank-check firm Landcadia Holdings Inc.
Landcadia had some powerful names behind it. Tilman Fertitta, a billionaire restaurateur, and Richard Handler, the chief executive officer of Jefferies Financial Group Inc., had raised $250 million in backing for Landcadia so that the special purpose acquisition company, or SPAC, could find and take public a promising startup like Waitr.
But Waitr turned out to be a disappointment. Its shares plummeted as it lost about 96% of its market value in 2019, down from a high of almost $1 billion. That triggered a class-action lawsuit claiming that Fertitta and Handler misled shareholders about the risks of Waitr’s business plan but pushed ahead with announcing their merger two weeks before L
Since the start of 2019, 13 SPAC-related shareholder lawsuits have been filed. Bloomberg | Feb 16, 2021
(Bloomberg) Waitr Inc. never had the resources of rivals Grubhub Inc. and UberEats. Yet in November 2018 the online food ordering and delivery business went public through a merger with blank-check firm Landcadia Holdings Inc.
Landcadia had some powerful names behind it. Tilman Fertitta, a billionaire restaurateur, and Richard Handler, the chief executive officer of Jefferies Financial Group Inc., had raised $250 million in backing for Landcadia so that the special purpose acquisition company, or SPAC, could find and take public a promising startup like Waitr.
But Waitr turned out to be a disappointment. Its shares plummeted as it lost about 96% of its market value in 2019, down from a high of almost $1 billion. That triggered a class-action lawsuit claiming that Fertitta and Handler misled shareholders about the risks of Waitr’s business plan but pushed ahe