Seyfarth Synopsis: Special Purpose
Acquisition Company (“SPAC”) transactions have
dramatically increased since the start of 2020, bringing with them
risk of securities litigation.
2020 has been characterized as the “Year of the
SPAC,” and there is no doubt that SPAC transactions are on
the rise.1 One industry tracker reports that in
2020 there were 248 SPAC initial public offerings
(“IPOs”) raising over $83 billion (as compared to 59
SPAC IPOs raising approximately $13.6 billion in 2019).2 This
trend is expected to continue in 2021 with 189 SPAC IPO
transactions this year at the time of writing.3
We expect this rise in SPAC transactions to be accompanied by
the continued filing of securities suits in the coming months and
years.4 Much of the litigation will be no
different than typical disclosure-related suits that might follow
any public company disclosure, but certain unique aspects of the
SPAC structure could create additional litigation risks.
