Delaware Chancery Court Issues First SPAC Decision

Summary

This First Analysis article discusses the recent In re Multiplan Corp. Stockholders Litig., 2022 Del. Ch. LEXIS 1 (Ch. Jan. 3, 2022), opinion by the Delaware Court of Chancery. In a much-anticipated decision, the Delaware Court of Chancery issued its first opinion involving shareholder challenges to de-SPAC transactions. In re Multiplan Corp. Stockholders Litig., 2022 Del. Ch. LEXIS 1 (Ch. Jan. 3, 2022). The court largely denied defendants' motions to dismiss the complaint, which stemmed from the October 2020 $11 billion de-SPAC transaction between prolific SPAC creator Michael Klein's Churchill Capital Corp. III (Churchill) and its target (MultiPlan), holding that plaintiffs' direct claims for breach of fiduciary duty against Mr. Klein and Churchill's board of directors could go forward. According to the court, plaintiffs adequately pleaded that (i) Churchill's proxy statement was materially misleading because it failed to disclose that one of MultiPlan's key customers was developing ...