Document Type
Article
Publication Title
Vanderbilt Law Review En Banc
Publication Date
8-2025
Page Number
117
Keywords
Chancery Court, fairness standard, conflicted fiduciaries
Disciplines
Commercial Law | Law
Abstract
In the Gig Cases, Vice Chancellor Will followed the line of analysis she first adopted in MultiPlan by applying traditional fiduciary principles to address conflicts inherent in the standard SPAC structure. First, the Vice Chancellor rejected application of the deferential business judgment rule in favor of the more exacting entire fairness standard, finding both a conflicted controller and a conflicted board. While maybe not outcome determinative, this standard of review places a heavy burden on fiduciary defendants that generally precludes pleading stage dismissal. Second, the Vice Chancellor closely parsed language in disclosures made to stockholders to support, at least at the pleading stage, allegations of misstatements and omissions adequate to survive a motion to dismiss. Clearly, SPAC sponsors and their designees on post-IPO boards of directors are not immune from the careful analysis that the Chancery Court will apply in any conflicted stockholder-related transaction, even when adhering to "the typical SPAC playbook."
Recommended Citation
Robert Reder and John Rand Dorney,
Chancery Court Applies Entire Fairness Standard of Review in Assessing Actions of Conflicted Fiduciaries Engaging in "Value-Destructive" SPAC Transactions, 77 Vanderbilt Law Review En Banc. 117
(2025)
Available at: https://scholarship.law.vanderbilt.edu/faculty-publications/1705