ATI Physical Therapy’s SPAC Sponsor Barred From Settlement Fund

The sponsor firm for a blank-check company that took ATI Physical Therapy Inc. public can’t participate in a nearly $25 million securities settlement, the Seventh Circuit affirmed.

The settlement over allegedly misleading statements before ATI went public excludes “defendants,” the US Court of Appeals for the Seventh Circuit said Wednesday in an unsigned, unpublished opinion. And the agreement defines Fortress Acquisition Sponsor II LLC as a defendant for purposes of settlement, the court said in rejecting the sponsor’s bid for 40% of the pie.

The decision marks the latest fallout from a wave of special purpose acquisition company mergers. Numerous ...