SPAC

SPACs are non-operating publicly-listed companies whose purpose is to identify and purchase a private company, allowing the acquisition target to have publicly-listed stock. The combination of the SPAC and the target is a deSPAC transaction.

Whether you are a director or officer at the SPAC or at the combined company post-deSPAC, the risks are unique and numerous. A typical public company D&O policy is the base policy for both lifecycles, however, it must be amended appropriately to address the unique risks of the SPAC and deSPAC companies.

Specifically for the SPAC:

Explicit coverage for actions taken, and representations made, during the roadshow.
Policy term aligned to the acquisition window, including any possible extensions.
Pre-negotiated extended reporting period (“runoff” or “tail” coverage) to trigger at the consummation of the initial business combination. Careful attention to the change of control language is required to effectuate the appropriate runoff structure.
Coordination between the SPAC program and the deSPAC.

As for the deSPAC:

For more information on SPAC expertise, please contact info@cacspecialty.com.

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