The notion that a SPAC’s trust is impenetrable and impossible to access by any party other than public SPAC shareholders through redemption or a target company at closing is one of the fundamental bedrocks of the SPAC product.
However, a number of peculiar legal situations have recently attempted to test that notion and one involving Financial Strategies Acquisition Corp. (OTC:FXCO) made it far enough that Continental Stock Transfer & Trust recently opted to step in to fight for the trust, SPAC Insider reports.
Financial Strategies Acquisition filed for Chapter 11 bankruptcy protection last November, nearly a year after redemptions on an extension vote wiped out 97% of its trust. In February 2023, the SPAC announced a merger agreement with Austin Biosciences at a $166.3 million valuation.
The SPAC cited noncontingent liquidated debts (excluding debts owed to insiders or affiliates) of less than $7.5 million in the bankruptcy filing.
Financial Strategies Acquisition raised $87.5 million in a 2021 IPO. Read more.
