MONTH-IN-BRIEF (Nov 2022)
Delaware Court Addresses Arbitrability of Claims Challenging 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.