Polestar Set to End SPAC Deal Challenge With $25 Million Payment

Polestar Automotive Holding UK Plc has agreed to pay $25 million to end litigation over the blank-check merger with a shell entity that took the electric-vehicle startup public.

The settlement, disclosed Tuesday in Delaware’s Chancery Court, would resolve shareholder claims against billionaire buyout pioneer Alec Gores and other architects of the automaker’s combination with a special purpose acquisition company. It calls for the payment to be made by Polestar or insurance carriers for Gores and the rest of the SPAC’s financial backers.

Polestar, a Volvo Car AB sister brand, is controlled by Zhejiang Geely Holding Group Co., an affiliate of ...