Chancery Court Allows deSPAC Litigation to Proceed

On January 3, 2022, the Delaware Court of Chancery issued an opinion denying motions to dismiss in In re Multiplan Corp. Stockholders Litigation, a stockholder action arising out of the completed business combination for Churchill Capital Corp III (“Churchill”), a special purpose acquisition company (“SPAC”), and Multiplan Inc. (“MultiPlan”). The court’s opinion has important implications for SPAC sponsors, directors, officers and other stakeholders because of its application of traditional Delaware corporate law concepts to a “deSPAC” business combination transaction. This article (i) summarizes the facts alleged by the plaintiffs in the case and the court’s conclusions; and (ii) provides key takeaways and practical considerations.