This Week in Chancery Court: Better Therapeutics SPAC Case, EOS

Mountain Crest Capital LLC will argue this week that the Delaware Chancery Court should dismiss investor claims that it engineered a blank-check merger between Better Therapeutics Inc. and a special purpose acquisition company that gave a windfall to insiders.

Here’s more from the court’s calendar:

Tuesday: Mehra v. Teller, Del. Ch., No. 2019-0812, post-trial arguments 6/11/24.

At issue: Closing arguments in a trial tied to the dissolution of EOS Investor Holding Company LLC were rescheduled from May. Chancellor Kathaleen St. Jude McCormick allowed an ex-manager of the lip balm maker to advance claims that another executive wrongfully seized control of the business after the dissolution of its parent company over a leadership deadlock. The parties went to trial in February. Sanjiv Mehra, the plaintiff, and Jonathan Teller, the defendant, continue to argue about the implementation of post-dissolution distributions under a 2014 operating agreement.

Court action: The rescheduled post-trial arguments will be held in Wilmington, Del.

EOS Executive Must Face Claims of Breach of Duty, Judge Says

Wednesday: Solak v. Mountain Crest Capital LLC., Del. Ch., No. 2023-0469, hearing 6/12/24.

At issue: Mountain Crest Capital, a SPAC sponsor, wants the court to dismiss Better Therapeutics’ lawsuit accusing it of tilting a $187 million merger in insiders’ favor. The biotech business didn’t properly allege a breach of fiduciary duty, Mountain Crest argues in a brief. Better Therapeutics says in its answering brief that its allegations that Mountain Crest provided stockholders “materially misleading” information are enough to move its lawsuit forward. Vice Chancellor Sam Glasscock III in October vacated his default judgment against Mountain Crest after principals denied being served with the case’s complaint.

Court action: Hearing on motion to dismiss via teleconference.

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