A Washington University professor examines the emerging regulatory framework for SPACs, noting that de-SPACs, must be “fair” to public (or unaffiliated) SPAC shareholders, and transaction participants face heightened liability risk for disclosure errors. This framework is a product of the SEC’s reform proposal for SPACs and recent decisions of the Delaware Court of Chancery, writes law professor Andrew Tuch. In this environment, third-party fairness opinions have been regarded as a de facto requirement for de-SPACs.
Tuch analyzes the significance of third-party fairness opinions and the proposed disclosure-oriented reforms. These opinions typically assess whether the consideration paid in a transaction is fair, from a financial point of view, to a party or group. The assessment of fairness opinions sheds light on the difficulties associated with evaluating and demonstrating a de-SPAC’s value for public shareholders. The heightened risk of disclosure liability adds to the stakes, given the transaction value’s materiality to public shareholders and the potential ramifications of any misstatement or omission for those involved. Read more.
