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New York Partner Eric Rieder and Atlanta Partner Amy Taylor Wilson authored an article published April 26 by Law360 examining special purpose acquisition companies (SPACs), which have exploded in popularity. Their article explains the difference between SPACs and traditional IPOs, takes a close look at key issues in litigation arising out of “de-SPAC” transactions where SPACs acquire operating businesses, and provides key takeaways to help reduce liability risks. “One driver of the popularity of SPACs is the perception that they have lower liability risks than traditional IPOs,” they wrote. “But a closer look at SPAC transactions suggests that the liability risks are not as low as some believe. Sponsors, directors and officers of SPAC companies should act to protect themselves against potential claims from both the private plaintiffs bar and the government.”

This document provides a general summary and is for information/educational purposes only. It is not intended to be comprehensive, nor does it constitute legal advice. Specific legal advice should always be sought before taking or refraining from taking any action.