The problems with SPACs

In this episode of Law, disrupted, host John B. Quinn joins Ellison Merkel, partner at Quinn Emanuel’s New York office, and Neil Shah, Senior Managing Director and Head of Alternative Capital at Evercore.

They begin by unpacking the evolution of special-purpose acquisition companies (SPACs) to explain how the capital-raising alternative took 2020 by storm, and discuss the litigations risks presented by the resurgence of this investment vehicle.

The conversation moves on to trends and developments in SPAC transactions, considering the advantages for companies and investors compared with traditional IPOs, as well as the potential risks, including conflicts of interest between sponsors and shareholders.

Referencing the MultiPlan stockholder litigation, John and his guests bring to light the heightened scrutiny on SPAC merger disclosures, and explore the impact of increased regulation and ligation on the market’s future. Together, they also address investor concerns for a higher rate of liquidations, and share their thoughts on the recipe for long-term SPAC success.