FAST Acquisition in a press release said it would vigorously defend itself against a lawsuit over the SPAC’s intention to keep a breakup fee of up to $33 million from a failed deal — without sharing the fee proceeds with shareholders. The SPAC said management believes the lawsuit is without merit.
One of its investors, Special Opportunities Fund, filed a class action lawsuit in the Delaware Court of Chancery against FAST Acquisition to prevent insiders from appropriating certain net assets through the dissolution of the SPAC.
FAST last week announced it would liquidate and return cash in trust to investors. However, the SPAC also disclosed that management intends to keep the entire breakup fee of up to $33 million from former merger partner Fertitta Entertainment.
Fertitta called off a deal with the SPAC last December. That agreement called for Fertitta to pay Fast Acquisition $26 million if the SPAC had not completed another deal by Aug. 1 of this year and subsequently decided to dissolve.
Fertitta has already paid $6 million to the SPAC plus a $1 million loan following the breakup, according to regulatory filings. In a 10-Q filing last week, Fast Acquisition states, “any funds received pursuant to the Settlement Agreement that are remaining after the payment of expenses will not be part of any distributions with respect to the Public Shares.”
That would amount to a nice payout for management on a deal that didn’t get done.
The complaint filed by investor Special Opportunities Fund contends that FAST’s board of directors has a fiduciary duty to distribute its net assets equitably to all stockholders in a dissolution. Read more.
