In this Essay, we revisit our analysis in A Sober Look at SPACs and assess whether that analysis—based on the 47 SPACs that merged between January 2019 and June 2020—provided a basis on which to predict that the dilution embedded in the SPAC structure would lead to severe shareholder losses...

SPACs have been evolving recently in ways that make them even more expensive vehicles to take companies public, and thus in ways that will likely lead to even worse returns for shareholders who hold their shares through SPAC mergers. Each of the changes is designed to allow sponsors to continue...

SPACs have been widely criticized for imposing high costs on SPAC shareholders and for the incentive they create for sponsors to enter into mergers that are bad deals. Some SPACs adopt sponsor earnouts, which reduce a sponsor’s compensation unless specified post-merger share price targets are...

"A successful business deal maximizes value for buyers and sellers alike. Drawing on diverse case studies and decades of experience, Michael Klausner and Guhan Subramanian show how contracting parties can reach that goal through rigorous attention to incentives, information asymmetries, exit...

A Special Purpose Acquisition Company (“SPAC”) is a publicly listed firm with a two-year lifespan during which it is expected to find a private company with which to merge and thereby bring public. SPACs have been touted as a cheaper way to go public than an IPO. This paper analyzes the...

In Cyan, Inc. v. Beaver County Employees Retirement Fund, the Supreme Court interpreted the Securities Litigation Uniform Standards Act of 1998 (SLUSA) to preserve state courts' jurisdiction to hear cases brought under the Securities Act of 1933, a question on which courts had been split. The...

Outside directors of public companies play a central role in overseeing management. Nonetheless, they have rarely incurred personal, out-of-pocket liability for failing to carry out their assigned tasks, either in the litigation-prone United States or other countries. Historically, as threats to...

Outside directors constitute a key component of most prescriptions for good governance of public companies. Given that outside directors are important corporate governance players, one is led to wonder what will motivate the individuals serving in this capacity to carry out their...