Although Special Purpose Acquisition Companies (SPACs) have been around for decades, only recently have they experienced an incredible surge in popularity and, inevitably, attention from regulators and plaintiffs’ law firms. As a result of this increase in scrutiny, it is crucial that SPAC sponsors, their boards of directors, and the directors and officers of acquisition targets take steps to limit litigation risk and minimize associated costs. Although each transaction presents its own unique circumstances, adherence to a thorough and well-documented transaction process is critical. Goodwin recommends consideration of the following to mitigate disclosure and process-based claims in connection with SPAC business combinations.

Hold board meetings -

SPAC boards should regularly hold board meetings in accordance with standard formalities, with an increase in frequency upon the identification of and engagement with a likely target.