Lead plaintiff Funicular Funds, LP and lead counsel Morris Kandinov filed a motion for preliminary approval of a $13 million settlement of claims arising from the liquidation of Pioneer Merger Corp., a special purpose acquisition company (SPAC). The amount equates to approximately $0.36 per share before expenses. The dispute arose from a cash termination fee paid by a counterparty in a broken deal with the SPAC. When the SPAC failed to find a replacement transaction, it announced that it would wind down and distribute only the amount held in its trust account to Class A common stockholders. The SPAC’s residual assets, i.e., the remaining cash from the termination fee, would be distributed solely to its Class B common stockholders, which consisted of the SPAC’s sponsor and other insiders.
Funicular Funds, LP filed litigation asserting breach of fiduciary duty and contract claims to protect the interests of Class A stockholders. The settlement obtains approximately 65% of remaining cash for distribution to Class A stockholders. The District Court has scheduled a hearing on preliminary approval for March 5, 2024.
The litigation is Funicular Funds, LP v. Pioneer Merger Corp., et al., No. 22-10986-JSR. Contact Aaron Morris for additional information.
