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Ask HN: Sue after poorly managed SPAC?

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Re: Ask HN: Sue after poorly managed SPAC?

#21

Post by spac_throwawayy »

nowherebeen wrote: post #10
spac_throwawayy wrote: post #8

Earlier quoted context omitted.

Right, which means they are incentivized to not give me access to my shares which I’m entitled to. Maybe not in their best interest for me to sell, so maybe fiduciary duty is the wrong thing. Seems like they can’t block me from selling. There must be something illegal with that.

Not necessary. You need to talk to a lawyer. No one here can give you legal advice.

It’s a pretty niche area of law from what I can tell. Most lawyers familiar with SPACs just set them up (already a relatively small area). Most securities lawyers familiar with similar suits don’t have SPAC experience. I’d welcome any leads on lawyers.

The independent lawyers I’ve talked to say something like “sounds like you could sue, but I’m not familiar with that area of law.”

Re: Ask HN: Sue after poorly managed SPAC?

#22

Post by xwdv »

spac_throwawayy wrote: post #18
xwdv wrote: post #16

The downside is you will waste a lot of time and money and will ultimately accomplish nothing. Not what you want to hear but it’s the truth. SPACs are mostly scams and most have done very poorly. You got caught up in one, reap what you sow.

Thanks for the dose of negativity but I left long before SPAC was the path and I’ve already sold for more than I ever expected the stock to be worth. The question is, should they get away with mishandling my stock to their benefit.

Seems like they already have.

Re: Ask HN: Sue after poorly managed SPAC?

#23

Post by echelon »

refurb wrote: post #12

I like the quote from the movie Heat: “He knew the risks, he didn’t have to be there. It rains you get wet.” SPACs are a high risk way of going public and nothing is guaranteed. You could certainly sue, it might takes years and money from your pocket to get a judgement you’ll never collect a dime on, but yeah, you can sue.

If the company goes bankrupt from the lawsuit, then there's no money left for anyone. Private equity will pick up the husk for pennies on the dollar.

Re: Ask HN: Sue after poorly managed SPAC?

#24

Post by dehrmann »

For comparison, I worked for Spotify and had shares when they direct-listed. First, they transferred shares from their ledger to Computershare (they were fine, but the website felt like it was made 15 years ago). From there, Spotify had an arrangement with Morgan Stanley to transfer the shares to their books. I was able to trade on the first day, but it had to be broker-assisted (they charge $120). Once the shares were with MS, it was easy enough to transfer them out to a discount brokerage.

The whole process was fine-ish, but I had to read things carefully, and I wasn't thrilled with fees from MS, but the process for transferring shares anywhere else was more complicated. Remember that these are unlisted shares, so transferring them is weird.

Re: Ask HN: Sue after poorly managed SPAC?

#25

Post by rasz »

spac_throwawayy wrote: post #5
toomuchtodo wrote: post #4

Recommend speaking with the firm willing to take the class action work, as well as having a review with an attorney specializing in securities law (consult cost should be less than $500). They'll (class action firm) work on contingency (typically, so you're not out of pocket, but they will take ~25-35% of whatever is recovered), and are a better gauge at your ability to recover damages than you are. Also, recovering…

Thanks. They have offered to work on contingency. Now it just requires someone to step up to be lead plaintiff in the case. Most people want to stay anonymous and only want to participate if someone else does all the work.

F-em, the less plaintiffs the bigger chance of settlement.

Re: Ask HN: Sue after poorly managed SPAC?

#26

Post by spac_throwawayy »

dehrmann wrote: post #24

For comparison, I worked for Spotify and had shares when they direct-listed. First, they transferred shares from their ledger to Computershare (they were fine, but the website felt like it was made 15 years ago). From there, Spotify had an arrangement with Morgan Stanley to transfer the shares to their books. I was able to trade on the first day, but it had to be broker-assisted (they charge $120). Once the shares we…

Thanks for this comparison. This sounds like what I’d expect: possible to sell on the first day though maybe not cheap or easy. We weren’t even told where our shares were until after they started trading. Turns out they were at a sort of holding company and the only thing to do was transfer them out (no way to sell). They were not made eligible for transfer until multiple days after trading started.

Re: Ask HN: Sue after poorly managed SPAC?

#27

Post by dehrmann »

echelon wrote: post #23
refurb wrote: post #12

I like the quote from the movie Heat: “He knew the risks, he didn’t have to be there. It rains you get wet.” SPACs are a high risk way of going public and nothing is guaranteed. You could certainly sue, it might takes years and money from your pocket to get a judgement you’ll never collect a dime on, but yeah, you can sue.

If the company goes bankrupt from the lawsuit, then there's no money left for anyone. Private equity will pick up the husk for pennies on the dollar.

> If the company goes bankrupt from the lawsuit, then there's no money left for anyone.

Bankruptcy means there isn't enough money for everyone, not that there's no money.

Re: Ask HN: Sue after poorly managed SPAC?

#28

Post by wombatpm »

If they will work on contingency, sue them. In the non SPAC world, investors sue all the time when the stock takes a major hit. Here they deprived you of you ability to sell to suckers. If the CEO and others got to sell at opening price - sue them for everything you can think of

Re: Ask HN: Sue after poorly managed SPAC?

#29

Post by indymike »

spac_throwawayy wrote: post #17
phphphphp wrote: post #11

SPACs are, in practice, a Hail Mary for companies with little hope of ever going public the traditional way because they’re just not that attractive to real investors. Therefore, if a company goes public via a SPAC, you should assume they’re in a very weak position. So, while you could conceivably sue (and perhaps get a settlement out of them) it’s going to be a pretty poor outcome for you even in the best case scena…

Thanks for the link, I hadn’t seen that (not from buzzfeed). I agree the company won’t be in a strong financial position to pay out a huge penalty, but they have plenty to pay me a settlement for a fraction of my damages (real money to me and insignificant on the scale of a public company). Interestingly, the law firm we’ve spoken too seems to want to avoid arbitration (the opposite of the buzzfeed case). Maybe that…

If the arbitration is non-binding, your lawyers are just trying to save you money.

Re: Ask HN: Sue after poorly managed SPAC?

#30

Post by birdyrooster »

spac_throwawayy wrote: post #5
toomuchtodo wrote: post #4

Recommend speaking with the firm willing to take the class action work, as well as having a review with an attorney specializing in securities law (consult cost should be less than $500). They'll (class action firm) work on contingency (typically, so you're not out of pocket, but they will take ~25-35% of whatever is recovered), and are a better gauge at your ability to recover damages than you are. Also, recovering…

Thanks. They have offered to work on contingency. Now it just requires someone to step up to be lead plaintiff in the case. Most people want to stay anonymous and only want to participate if someone else does all the work.

Lead plaintiffs regularly get more out of class action than the rest of the class.
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