Cantor, Lutnick Pay $12 Million to Settle View Inc. SPAC Case

Cantor Fitzgerald LP, billionaire chief Howard Lutnick, and other architects of View Inc.'s blank-check merger agreed to pay $12 million to end litigation challenging the deal.

The settlement disclosed Thursday would resolve shareholder claims targeting the 2021 transaction, which took the “smart glass” maker public by combining it with a special purpose acquisition company.

The lawsuit, filed in November, said Lutnick and the others were driven by lopsided incentives to dupe the SPAC’s investors into a doomed deal that gave insiders a windfall.

The case was one of scores filed in Delaware’s Chancery Court over SPAC mergers since the wave of blank-check deals began to recede from a boom in 2020 and 2021. The transactions—designed to let startups bypass initial public offerings—have landed in courts nationwide after the sector underperformed in the open market.

Like most of those other suits, the View case targeted a standard feature of the transactions: “founder shares” costing fractions of a penny that soar in value by a factor of thousands if a merger closes. Those shares given to insiders become worthless if no transaction is found, if investors vote one down, or if they exercise their right to cash out.

According to the shareholder complaint, founder shares worth nearly $115 million at closing gave Lutnick and other sponsors of CF Finance Acquisition Corp. II—one of several SPACs backed by Cantor—a powerful incentive to tell a false narrative about the merger’s prospects. As a result, they drastically misrepresented View’s financial health to ensure the deal closed, the suit said.

As the truth emerged in fits and starts over the following years, View’s shares plunged from the SPAC’s $10 IPO price to “the functional equivalent” of $0.05, discounting a reverse stock split, according to the court complaint last year. View announced in April that it would go private and file for Chapter 11 as part of a deal with Cantor.

The legal settlement is designed to put the allegations “to rest, finally and forever, without in any way acknowledging any wrongdoing, fault, liability, or damages,” Thursday’s joint filing says.

Because the case is a class action, the accord requires the approval of the presiding judge, Vice Chancellor J. Travis Laster.

The investors, Mariano Siseles and Zalmon Uyaydov, are represented by Grant & Eisenhofer PA, Robbins Geller Rudman & Dowd LLP, Robbins LLP, Morris Kandinov LLP, and Stanford University law professor Michael Klausner, who developed a leading legal theory for challenging SPAC mergers.

Cantor, Lutnick, and the other deal sponsors are represented by Young Conaway Stargatt & Taylor LLP and Latham & Watkins LLP.

The case is Siseles v. Lutnick, Del. Ch., No. 2023-1152, 8/22/24.