Lucid electric cars. Credit: Chris Allan/Adobe Stock IPO to Insolvency: Big Law Isn't Done Making Money on EV SPACs
"They didn't care because they were making too much money off of it, and now it's especially sad that they're finding yet another way to make money off of the very problems they helped create," Yale Law School professor John Morley said of the corporate lawyers who participated in the frenzy.
April 09, 2024 at 05:00 AM
8 minute read
Bankruptcy
What You Need to Know
- Big Law firms helped at least 15 electric vehicle companies go public during the pandemic via special purpose acquisition companies.
- Pre-merger investors lost money on all of the deals, half of which are in court for securities class actions, criminal fraud trials or bankruptcy proceedings.
- As they prepare to restructure the same deals they architected, Big Law firms are poised to make even more money on the SPAC craze.
Hope abounded in the world of electric vehicle startups in 2020 and 2021, when low interest rates showered the high-tech sector with cheap cash.
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