SPACs Are Having Their Day—in Court
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Blank-check companies are booming again—in the courts.

Two law professors are aiming at high-profile targets, filing suits that question the legality of a specific type of special-purpose acquisition company. Among them are billionaire William Ackman’s $4 billion Pershing Square Tontine Holdings Ltd. , Go Acquisition Corp , co-founded by veteran entrepreneur Noam Gottesman, and E.Merge Technology Acquisition Corp.

Another line of legal attack is more typical, focusing on SPACs whose shares suffer big falls. These are targeting once-hot companies like electric truck maker Nikola Corp. , which class-action suits claim defrauded investors.

So far this year, there have been 19 of these more typical class-action lawsuits concerning SPACs filed in federal court. Five were filed in all of 2020, according to insurance brokerage Woodruff Sawyer & Co. In 2019, before the SPAC boom lit up the markets, there were two suits.

SPACs were a more popular target for federal class-action lawsuits in the first half of this year than other hot-button litigation areas, such as Covid-19 or cryptocurrencies, according to consulting firm Cornerstone Research.