Judge Ronnie Abrams of the US District Court for the Southern District of New York dismissed a putative class action arising out of a SPAC transaction that resulted in a consignment-to-retail used car marketplace becoming publicly traded, Shearman and Sterling note.
Plaintiffs asserted claims under the Securities Act of 1933 and the Securities Exchange Act of 1934 against the marketplace, the SPAC entity (Acamar Partners Acquisition), and related entities and individuals, alleging that they made misrepresentations regarding the marketplace’s business model. The court held that plaintiffs lacked standing to sue under either the Securities Act or Exchange Act, and accordingly dismissed the complaint while permitting plaintiffs leave to replead.
CarLotz, a consignment-to-retail used vehicle marketplace, completed its $750 million business combination with Acamar in January 2021. CarLotz later merged in December 2022 with with Shift, a used-car ecommerce platform. Read more.
