Creditors of Failed SPAC Secure Standing to Sue Insiders

Packable Holdings LLC’s creditors have standing to sue the fallen company’s insiders under the binding precedent of the Third Circuit, the US Bankruptcy Court for the District of Delaware said.

The company, founded in 2010 and later backed in part by Carlyle Group, sold health and beauty products online. After an attempt to go public through a special purpose acquisition company fell apart, Packable filed for bankruptcy and announced that it would liquidate last year.

Creditors say the company’s collapse was due to mismanagement and self-dealing, and have filed suits against the company’s founders and other insiders.

In ruling on ...