Delaware chancery court approves investor settlement over special purpose acquisition company breakup fee
FAST Acquisition Corp. will pay $12.5 million to resolve investor litigation alleging company executives tried to retain a $33 million breakup fee to end a planned merger with the parent company of Landry’s restaurants, under a settlement approved by the Delaware Court of Chancery.
FAST Acquisition, a special purpose acquisition company backed by Ruby Tuesday founder Sandy Beall, in December 2021 terminated a plan, announced in February, to take the Landry’s-Golden Nugget parent public after owner Tilman Fertitta agreed to pay up to $33 million.
Bloomberg Law reported Monday that FAST Acquisition said when the lawsuit was filed in August 2022 that it would vigorously defend itself against the plaintiffs over the SPAC’s intention to keep the = fee from the failed deal. FAST liquidated later that same month, Bloomberg reported, as its charter had called for a deal to be closed by Aug. 25, 2022.
FAST Acquisition was created in August 2020 by co-CEOs Doug Jacob and Beall with the stated intent of acquiring a company in the quick-service space.
In the settlement this week, Paul Fioravanti Jr., vice chancellor of the Delaware Court of Chancery, also approved a $2 million attorneys’ fee award, plus about $43,000 in expenses, Bloomberg reported.
A $5,000 incentive award for the class’s lead plaintiff, Special Opportunities Fund, will be deducted from the attorneys’ fee award, the report said.
In December 2021, FAST Acquisition Corp. and Fertitta Entertainment Inc. terminated the SPAC’s plan to take the Landry’s-Golden Nugget parent public after owner Tilman Fertitta agreed to pay up to $33 million. The deal had been announced earlier in the year.
Ridgefield, Conn.-based FAST Acquisition and Houston-based Fertitta filed the settlement with the Securities and Exchange Commission after disagreeing over the termination date of the merger agreement.
The settlement provided FAST up to $33 million through a combination of upfront and deferred payments, part of which are contingent on whether the SPAC ultimately closed a transaction.
“The settlement includes a payment to the SPAC, which will be used to cover expenses associated with the terminated transaction as well as a replenishment of the SPAC’s working capital account,” the acquisition company said in a statement. “FAST intends to continue to seek a business combination with another operating company.” However, the SPAC reportedly liquidated.
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