Mountain Crest Faces Lawsuit Over Better Therapeutics SPAC Deal

Mountain Crest Acquisition II

A Better Therapeutics shareholder sued the architects of its blank-check transaction, claiming the deal’s lopsided structure gave insiders a huge windfall despite virtually wiping out public investors, Bloomberg reports.

The lawsuit targets the Mountain Crest Capital affiliates who engineered the $187 million merger between Better Therapeutics and SPAC Mountain Crest Acquisition II. The SPAC’s shareholderrs approved the deal in October 2021. At that time, shares were trading around $9.30. Better Therapeutics closed today at $1.13, down 2.59%.

Better Therapeutics is developing a novel form of cognitive behavioral therapy to address the root causes of cardiometabolic diseases. 

Mountain Crest and its principals are serial SPAC sponsors whose previous ventures include the blank-check deal that took Playboy public.

The dispute in Delaware’s Chancery Court is the latest in a wave of investor litigation prompted by transactions that give private businesses a shortcut to capital markets through blank-check transactions. Read more.

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