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Liability for SPAC Flops: Waitr Could Be Test Case for Disgruntled Investor Lawsuits
Waitr Inc. never had the resources of rivals Grubhub Inc. and UberEats. Yet in November 2018 the online food ordering and delivery business went public through a merger with blank-check firm Landcadia Holdings Inc.
Landcadia had some powerful names behind it. Tilman Fertitta, a billionaire restaurateur, and Richard Handler, the chief executive officer of Jefferies Financial Group Inc., had raised $250 million in backing for Landcadia so that the special purpose acquisition company, or SPAC, could find and take public a promising startup like Waitr.
But Waitr turned out to be a disappointment. Its shares plummeted as it lost about 96% of its market value in 2019, down from a high of almost $1 billion. That triggered a class-action lawsuit claiming that Fertitta and Handler misled shareholders about the risks of Waitr’s business plan but pushed ahead with announcing their merger two weeks before L
Since the start of 2019, 13 SPAC-related shareholder lawsuits have been filed. Bloomberg | Feb 16, 2021
(Bloomberg) Waitr Inc. never had the resources of rivals Grubhub Inc. and UberEats. Yet in November 2018 the online food ordering and delivery business went public through a merger with blank-check firm Landcadia Holdings Inc.
Landcadia had some powerful names behind it. Tilman Fertitta, a billionaire restaurateur, and Richard Handler, the chief executive officer of Jefferies Financial Group Inc., had raised $250 million in backing for Landcadia so that the special purpose acquisition company, or SPAC, could find and take public a promising startup like Waitr.
But Waitr turned out to be a disappointment. Its shares plummeted as it lost about 96% of its market value in 2019, down from a high of almost $1 billion. That triggered a class-action lawsuit claiming that Fertitta and Handler misled shareholders about the risks of Waitr’s business plan but pushed ahe
Securities class-action lawsuits plummet in 2020 – report
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The number of securities class-action lawsuits filed in 2020 dropped significantly from the record-setting levels in 2019, according to a report released Wednesday by Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse.
Plaintiffs filed 334 securities class-action cases in federal and state courts in 2020, a 22% reduction from the 427 cases filed in 2019. It was the first time since 2016 that plaintiffs filed complaints against fewer than 400 issuers in a year, according to the report, Securities Class Action Filings 2020 Year in Review.
The number of core filings those not focused on mergers and acquisitions fell 12% in 2020 to 234. Mergers and acquisitions filings were down to 100 in 2020 from 160 in the year prior.