Law Professor Takes SPAC Sponsors to Court


Stanford Law Professor Michael Klausner toiled in academic obscurity for decades until 2020, when he wrote a paper slamming SPACs, Bloomberg Law reports.

Now he’s taking his newfound cache to Delaware Chancery Court. He’ll argue in a hearing tomorrow that blank-check company GigCapital3 did what SPACs across the industry do — allegedly hide from investors how much money they give to insiders through the promise of nearly free shares.

Klausner’s lawsuits targeting GigCapital3 and two other SPACs highlight potential legal risks for SPAC sponsors. He seeks to claw back for ordinary investors the millions of dollars sponsors made in closing deals. Read more.

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