Two law professors have sought to have Bill Ackman’s record-breaking blank-check company declared illegal, and with it all 400 or so SPACs still seeking dance partners. (Those SPACs who have already married have their own existential legal issues, but those are for another day.) For his part, Ackman has called the lawsuit bullshit, but also decided it means he doesn’t want to be in the SPAC business anymore at all.

Well, just in case some smart-ass judge thinks that’s the perfect reason for junking that smart-ass lawsuit, those professors and their allies have a back-up plan. Two, in fact. For a start.

In addition to his eye-popping lawsuit against Bill Ackman’s troubled special purpose acquisition company, Pershing Square Tontine Holdings, Assad has just filed two similar lawsuits in federal court against SPACs GO Acquisition Corp. and E.Merge Technology…. All three cases accuse the SPACs and their sponsors and directors of breaching the Investment Company Act of 1940 because they hold securities…. Similar allegations could be made against all SPACs….

The new lawsuits target other heavy hitters in the financial and corporate world. GO Acquisition was founded by Noam Gottesman, who co-founded hedge fund GLG Partners, and Gregory O’Hara, the former chief investment officer of J.P. Morgan’s special investments group. O’Hara is now the president of Clementine Investments, a specialty travel and hospitality private investment firm.

Lest Gottesman, O’Hara and 398 other SPAC sponsors think Ackman’s found a clever way out, well, it isn’t quite that easy.

“It is time consuming and I don’t expect this to be a short process given the level of scrutiny of SPACs,” said Jocelyn Arel, a partner at Goodwin Procter LLP…. The SPARC is an untested product that is a “very tenuous” offering for shareholders, said William Birdthistle, a securities law professor at Chicago-Kent College of Law. “I find that a strange fallback position….”

The SEC’s concerns about the blank-check market is only one of several challenges the SPARC faces in securing the agency’s approval, Birdthistle said.

A SPARC would also need the New York Stock Exchange to agree to change some of its rules to allow SPARC warrants to trade on the exchange, according to Ackman’s Aug. 19 letter to investors.

The NYSE would have to then submit the proposed changes to the SEC for approval, a process that could extend into 2022.

Ackman’s SPARC model appears to have some similarities with a private equity fund that would trigger SEC rules concerning investment companies, Birdthistle said. Such regulations would limit investments from retail investors.

The SPARC is also a novelty made in response to a legal setback, he said.

“I wouldn’t really like to be betting on the viability of a SPARC,” Birdthistle said.

Only one option, then, really: Press on and hope for the best (or at least that you’ve cut enough of a sweetheart deal for yourself to make it worthwhile come what may).

[Forbes], merging with Magnum Opus Acquisition, is expected to be valued at an implied pro forma enterprise value of $630 million, net of tax benefits…. Forbes said the move will “further capitalize on its successful digital transformation, using technology and data-driven insights to create more deeply engaged audiences, and associated high-quality and recurring revenue streams.”

Two More SPACs Hit With ‘Reform’ Lawsuits From the Plaintiff Suing Pershing Square Tontine [II]
Ackman’s SPAC Twist Faces Slow Going With Risk-Wary Regulators [Bloomberg Law]
Forbes announces plan to go public via SPAC [CNBC]

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