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4 Corp. & Bus. L.J. 1 (2023)

handle is hein.journals/cablj4 and id is 1 raw text is: CoRP. & Bus. L. J. NOT SO FAST, SPACS: DISLOYALTY, EMERGING DELAWARE CORPORATE LAW, AND HOW TO PROTECT SPAC MANAGEMENT AND SHAREHOLDERS ALIKE Travis Corbin CONTENTS IN TR O D U C TIO N ........................................................................................... . . 3 I THE CONFLICTS OF INTEREST INHERENT TO THE SPAC ..................... 9 A . Basic SPA C P rocedure ................................................................... 9 B. Conflicts ofInterest Between SPAC Sponsors and Shareholders.... 10 1. The Dangers of the Promote ................................................. 10 2. SPAC Pavment Structures ................................................... 11 3. Manipulating the De-SPAC Vote .......................................... 13 4. Whv Unsophisticated Investors Do Not Redeem ................... 16 5. Paternalism is a Nonstarter ................................................. 18 II. The Court of Chancery Grapples with the SPAC ............................. 22 A. The Facts of In re M ultiplan ....................................................... 22 B. The Court of Chancery's Legal Analysis ...................................... 24 1. Preliminarv Items .................................................................... 25 2. F iduciarv C laim s ................................................................. 25 C. Implications of In re M ultiplan.................................................... 29 III. IN SEARCH OF A CLEANSING PROCEDURE ........................................ 33 A. Freezeout Cleansing Procedures ................................................. 33 B. Applying Kahn's Dual-Procedural Protections to SPACs ........... 35 1. Securing Clean Board ofApproval .................................... 36 2. Ensuring that Shareholders and Uncoerced and In formed ....... 37 C O N C L U SIO N ............................................................................................. . . 4 1 1 Vol.4: 1: 2023

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