In 2021 and continuing into 2022, the magnitude of SPAC deals was historic. While the number of announced SPAC deals slipped in 2022 (by as much as half) and the number of withdrawn SPACs increased, the initial wave of “busted SPACs” has started, and many are approaching deadlines to consummate business mergers or consider liquidation and restructuring alternatives.

At the same time, post-merger transactions are finding their way to the Delaware Court of Chancery. In Delman v. GigAcquisitions3, LLC, et al., the Chancery Court identified what it viewed as an inherent conflict as between SPAC shareholders and sponsors in connection with the decision to vote for a de-SPAC merger and, as such, provides guidance for go-forward SPAC structures and shareholder solicitations. Due to the magnitude of SPAC deals in the past three years, this article suggests best practices for mitigating liability for post-merger claims.