Recent Motion-to-Dismiss Decisions Underscore Uncertain Litigation Prospects for SPAC Participants

Jones Day – The use of SPACs to take companies public increased dramatically in recent years, but many of these new companies performed poorly after entering the public capital markets. This poor performance, often accompanied by negative reports from short sellers, led to the filing of numerous securities class actions. These lawsuits typically name a number of participants in the de-SPAC transaction as defendants, including the companies and their officers and directors. Over the last year, federal district courts have begun to evaluate motions to dismiss these SPAC-related securities claims.

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