EV Startup Canoo Withheld Information in SPAC Deal, Lawyer Says

Architects of electric vehicle startup Canoo Inc.’s blank-check merger sought to distance its struggles from a wave of similar shareholder challenges to transactions involving special purpose acquisition companies during oral arguments Wednesday in Delaware.

Such transactions are intended to allow startups, many in the electric vehicle industry, to bypass traditional initial public offerings. As in other SPAC lawsuits, an investor alleged shareholders had been duped into the merger that took Canoo public.

What’s different in Canoo’s case is that the transaction’s sponsors, including Hennessy Capital LLC, were the victims of deception, said James Ducayet of Sidley Austin LLP, representing the ...