With no merger deal, failed SPAC faces lawsuit over legal fees

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Law firm White & Case has sued a special purpose acquisition company for more than $8.2 million in legal fees, claiming it stiffed the firm after failing to consummate a planned $480 million merger and then announcing plans to wind down this month.

former client Colonnade Acquisition Corp II and its directors in New York state court late Monday, arguing the firm will be "irreparably harmed" if the blank-check company liquidates and dissolves before paying the fees it owes.

Blank-check firm Colonnade, led by investors Joseph Sambuco and Remy Trafelet, raised $300 million in an IPO and started trading on the New York Stock Exchange on March 10, 2021. In August 2022, payments provider Plastiq said it would go public through a merger with the firm, creating a company with a value of about $480 million.

The SPAC did not complete the combination by its March 12, 2023 deadline, however, and on March 9 issued a press release that it will cease operations, redeem the public shares and dissolve. "It is unfortunate White & Case took this action given the mutually agreed-upon terms of the engagement letters and the totality of the circumstances," Colonnade said in a statement on the lawsuit Tuesday.

White & Case said it performed legal work for West Palm Beach, Florida-based Colonnade from November 2020, when the SPAC dealmaking frenzy was in full swing, until this month.

 

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