Business Litigation & Dispute Resolution

Editors (4)

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Cadwalader, Wickersham & Taft LLP

Sara Bussiere

Executive Editor, Business Litigation & Dispute Resolution
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Troutman Pepper Hamilton Sanders LLP

Armeen Mistry Shroff

Managing Editor, Business Litigation & Dispute Resolution
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Moritt Hock & Hamroff LLP

Leslie Ann Berkoff

Contributing Editor, Business Litigation & Dispute Resolution
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MONTH-IN-BRIEF (Nov 2022)

Business Litigation

Delaware Court Addresses Arbitrability of Claims Challenging Post-SPAC IPO

By Leah E. León, Lauren G. DeBona, and Shannon E. German

In BuzzFeed, Inc. v. Anderson,[1] the Delaware Court of Chancery rejected a recent attempt to force arbitration of claims stemming from a post-SPAC IPO.

Defendants were employees of, and compensated with stock in, Buzzfeed, Inc. (“Old Buzzfeed”). Old Buzzfeed completed a SPAC transaction, and Defendants’ stock automatically converted into equivalent stock in Buzzfeed’s post-SPAC form (“New Buzzfeed”). New Buzzfeed then conducted an IPO, offering a new class of stock.

Relying on arbitration provisions in employment agreements with Old Buzzfeed (the “Agreements”), Defendants filed arbitration claims against New Buzzfeed and four of its officers and directors (collectively, “Plaintiffs”). Defendants claimed they were wrongfully excluded from participating in the IPO because they could not timely convert their New Buzzfeed stock to tradeable shares.

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