Architects of EV maker Canoo’s blank-check merger defeated shareholder litigation challenging the transaction, which made the electric vehicle startup a publicly traded company.
A Delaware judge threw the case out May 31, rejecting claims that Hennessy Capital and its principals duped investors by keeping a lid on Canoo’s plan to overhaul its business model, Bloomberg reports. The legal theory “is belied by the plaintiff’s own allegations,” Vice Chancellor Lori W. Will said. “To allow this faulty claim to proceed would fuel perverse incentives and invite strike suits.”
Canoo and Hennessy Capital Acquisition IV completed their business combination in December 2020.
Canoo develops electric vehicles “with a proprietary and highly versatile EV platform for personal and business use,” the company has said.
The merger consideration payable to Canoo shareholders consisted of 175 million newly issued shares of Hennessy Capital common stock at $10 per share and up to an additional 15 million shares of Hennessy common stock if certain share price thresholds are achieved within five years after the closing. Read more.
