{"id":1973,"date":"2021-04-09T17:26:41","date_gmt":"2021-04-09T21:26:41","guid":{"rendered":"https:\/\/seci.wpenginepowered.com\/?p=1973"},"modified":"2021-04-09T17:33:38","modified_gmt":"2021-04-09T21:33:38","slug":"de-spac-transaction-liability-a-public-statement-from-the-corpfin-acting-chair","status":"publish","type":"post","link":"https:\/\/seciblog.pli.edu\/index.php\/de-spac-transaction-liability-a-public-statement-from-the-corpfin-acting-chair\/","title":{"rendered":"De-SPAC Transaction Liability \u2013 A Public Statement from the CorpFin Acting Director"},"content":{"rendered":"<p>On April 8, 2021, Acting CorpFin Director John Coates issued a <a href=\"https:\/\/www.sec.gov\/news\/public-statement\/spacs-ipos-liability-risk-under-securities-laws\">Public Statement<\/a> \u2013\u00a0\u201cSPACs, IPOs and Liability Risk under the Securities Laws.\u201d<\/p>\n<p>Mr. Coates briefly reviews how SPACs, as shell companies, raise capital in an IPO and use this capital to acquire a private company in a \u201cde-SPACing transaction.\u201d\u00a0 The de-SPACing transaction is structured so that the SPAC\u2019s public company status and exchange listing survive to the combined entity.\u00a0 Given the volume and complexity of these transactions, Mr. Coates affirms that the <strong>CorpFin staff is \u201ccontinuing to look carefully at filings and disclosures by SPACs and their private targets<\/strong>.\u201d<\/p>\n<p>He then provides a thoughtful discussion about <strong>legal liabilities in disclosures surrounding de-SPACing transactions<\/strong>.\u00a0 He addresses various \u201cclaims\u201d that de-SPACing transactions present reduced liability compared to a traditional IPO transaction.\u00a0 As an example, part of the discussion addresses how the 1995 Private Securities Litigation Reform Act applies to disclosures, particularly projections, in de-SPACing transactions.\u00a0 Mr. Coates explores the definition of initial public offering and whether a de-SPACing transaction, where a private company is seen by the public for the first time, could be an initial public offering as contemplated in the 1995 Act.\u00a0 If this were the case, the 1995 Act safe harbors might not apply to de-SPACing transactions.<\/p>\n<p>There is much relevant discussion along with suggestions for next steps in Mr. Coates <a href=\"https:\/\/www.sec.gov\/news\/public-statement\/spacs-ipos-liability-risk-under-securities-laws\">statement<\/a>.<\/p>\n<p>As always, your thoughts and comments are welcome.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>On April 8, 2021, Acting CorpFin Director John Coates issued a Public Statement \u2013\u00a0\u201cSPACs, IPOs and Liability Risk under the Securities Laws.\u201d Mr. Coates briefly reviews how SPACs, as shell companies, raise capital in an IPO and use this capital to acquire a private company in a \u201cde-SPACing transaction.\u201d\u00a0 The de-SPACing transaction is structured so &hellip; <a href=\"https:\/\/seciblog.pli.edu\/index.php\/de-spac-transaction-liability-a-public-statement-from-the-corpfin-acting-chair\/\" class=\"more-link\">Continue reading <span class=\"screen-reader-text\">De-SPAC Transaction Liability \u2013 A Public Statement from the CorpFin Acting Director<\/span> <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[143,242],"tags":[],"coauthors":[154],"class_list":["post-1973","post","type-post","status-publish","format-standard","hentry","category-hot-topic","category-reporting"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts\/1973","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/comments?post=1973"}],"version-history":[{"count":0,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts\/1973\/revisions"}],"wp:attachment":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/media?parent=1973"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/categories?post=1973"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/tags?post=1973"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/coauthors?post=1973"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}