With no merger deal, failed SPAC faces lawsuit over legal fees
(Reuters) – Law organization White & Situation has sued a distinctive objective acquisition firm for much more than $8.2 million in authorized service fees, boasting it stiffed the business right after failing to consummate a prepared $480 million merger and then announcing designs to wind down this month.
New York-founded White & Situation sued former client Colonnade Acquisition Corp II and its administrators in New York point out courtroom late Monday, arguing the organization will be “irreparably harmed” if the blank-examine enterprise liquidates and dissolves before spending the service fees it owes.
Blank-check company Colonnade, led by buyers Joseph Sambuco and Remy Trafelet, elevated $300 million in an IPO and started off investing on the New York Stock Exchange on March 10, 2021. In August 2022, payments service provider Plastiq stated it would go general public by means of a merger with the organization, generating a corporation with a benefit of about $480 million.
The SPAC did not entire the mix by its March 12, 2023 deadline, even so, and on March 9 issued a press release that it will stop functions, redeem the general public shares and dissolve.
“It is unlucky White & Situation took this motion provided the mutually agreed-upon phrases of the engagement letters and the totality of the conditions,” Colonnade said in a assertion on the lawsuit Tuesday.
White & Circumstance mentioned it done legal operate for West Palm Seaside, Florida-dependent Colonnade from November 2020, when the SPAC dealmaking frenzy was in total swing, right until this month.
The SPAC market place has sagged as regulatory scrutiny tightens and growing volatility spooks buyers, triggering better redemptions. A number of SPACs have returned cash they lifted soon after failing to obtain suited targets.
Two engagement letters with Colonnade explained White & Case’s premiums and the scope of its get the job done and claimed the business would search for payment at a afterwards day, with the earlier letter noting the business would invoice the organization at the time it shut or abandoned a deal and the latter stating payment would be thanks on closing the deal, the agency said.
White & Situation mentioned Colonnade “either disregarded or rebuffed” quite a few requires requesting payment.
The regulation business mentioned it contacted the blank-check organization as recently as late February in search of payment of the service fees, which totaled about $8,289,100. The SPAC stated in response that it did not owe the business any dollars for the 3 yrs of get the job done due to the fact it did not complete the enterprise transaction, according to the grievance.
The case is White & Circumstance LLP v. Colonnade Acquisition Corp. II et al, Supreme Court docket of the State of New York, County of New York, No. 651428/2023
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