MONTH-IN-BRIEF (Apr 2023)
Another SPAC Breach of Fiduciary Duty Suit Pulls in Bankers
By Yelena Dunaevsky, Esq., SVP & Partner, Transactional Insurance, Woodruff Sawyer
Another SPAC-related direct breach of fiduciary duty lawsuit was filed on April 3, 2023, in the Delaware Court of Chancery. This lawsuit follows on the heels of the Multiplan and Gig3 lawsuits that are similar in nature. In both of those cases, Vice Chancellor Lori W. Will denied the defendants’ motions to dismiss and held that the entire fairness standard rather than the business judgement rule should be applied in those cases. Many thought those two decisions would embolden the plaintiff’s bar to launch a wave of similar lawsuits against SPACs. The wave has not yet materialized, but the current case, brought by stockholders of Trident Acquisition Corp. against directors and officers of Trident Acquisition Corp. in connection with the SPAC’s merger with AutoLotto, is continuing the trend.