Rose Hill Acquisition, which announced plans to liquidate after terminating a deal last November, reportedly attempted to repay $600,000 in creditor bills from investor funds held in the SPAC’s trust. Continental Stock Transfer & Trust has moved to halt the attempt.
On Jan. 11, Rose Hill filed a Wind-Up Petition to the Grand Court of the Cayman Islands, arguing that the SPAC was insolvent because it was unable to pay the creditor bills, and that liquidators needed to be appointed to take the remaining $3 million out of the trust account, adjudicate whether the creditors can be paid from it, and use the money to pay for valid creditor claims.
Boilerplate language in blank-check IPO prospectuses state plainly that investor cash is to be held in trust for the sole benefit of investors, not the SPAC’s creditors.
Moreover, as custodian of the trust, Continental is legally bound to protect investors’ assets.
The SPAC originally raised $125 million in an October 2021 IPO. Read more.
