June 6, 2024 – Bloomberg Law and Law360 report on a lawsuit brought by Brewer, Attorneys & Counselors on behalf of Marci Donovitz against Cooley LLP and Biote company insiders concerning a special purpose acquisition company (SPAC) merger with the hormone therapy company Biote .
The lawsuit filed in Delaware Chancery Court concerned the 2022 merger of Biote with Haymaker Acquisition Corp. III, a SPAC company. The reporting noted that the defendants — including Cooley lawyers, SPAC founders and company insiders – failed to disclose material aspects of the deal as it deteriorated.
Bloomberg Law notes that the family trust , the Donovitz Family Irrevocable Trust, says its holdings were diluted in favor of the corporate insiders. Law360 writes that the lawsuit contends that the insider defendants conspired to close the merger for their own benefit.
In a statement, William A. Brewer III of Brewer, Attorneys & Counselors, counsel for the trust and its trustee Marci Donovitz, said: "The lawsuit reveals the inner workings of a scheme to enrich a few — at the expense of the owner who built the company. Our client believes a handful of insiders conspired to secure lucrative benefits to which they were not entitled."
Bloomberg Law noted that the SPAC market has “all but evaporated” as a growing number of deals resulted in litigation that alleged they benefitted insiders rather than helping companies grow.
Read the Bloomberg Law article here.
Read the Law360 article here.