Sullivan & Cromwell Discusses Delaware Chancery’s First Fiduciary-Duty Opinion on SPACs

On January 3, 2021, in In re MultiPlan Corp. Stockholders Litigation,[1] the Delaware Court of Chancery denied a motion to dismiss a complaint brought by SPAC stockholders against the SPAC, its sponsor and its directors.  Plaintiffs alleged that defendants breached their fiduciary duties in connection with the de‑SPAC transaction by issuing a false and misleading proxy statement that failed to disclose the impending loss of the target’s largest customer, which led to a significant drop in stock price following the de-SPAC transaction.

Notably, the Court held that the entire fairness standard of review would apply to assess the … Read more