In a case filed simply to determine whether a plaintiff was entitled to attorneys’ fees and expenses for conferring a benefit on a corporation, the Delaware Court of Chancery held that the planned stockholder vote by the corporation would have been insufficient under Delaware law to authorize amendments to the corporation’s certificate of incorporation in connection with a de-SPAC merger transaction. Garfield v. Boxed, Inc., No. 2022-0132-MTZ, 2022 WL 17959766 (Del. Ch. Dec. 27, 2022).
Since many SPACs with dual-class common stock utilized the same or a similar certificate of incorporation as the one at issue in Boxed, Inc., this ruling has thrown into question the validity of publicly traded shares of such companies, Market Screener reports. These companies are now rushing to the Delaware Court of Chancery with petitions for relief to avoid having their shares be deemed invalidly issued. Read more.
