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Alta Mesa Loses Bid to End Securities Fraud Suit Over SPAC Deal

April 14, 2021, 9:39 PM

Former leaders and financial backers of Alta Mesa Resources Inc., an energy business that collapsed after combining with a blank-check company to go public, must face securities fraud claims brought by a group of pension and investment funds, a federal judge in Houston ruled Wednesday.

Judge George C. Hanks Jr. let the proposed shareholder class action advance, citing allegations that Alta Mesa “clandestinely used unconventional and unsustainable drilling methods to inflate reserve and earnings estimates both before and after” its merger with a “special purpose acquisition company.”

The lawsuit plausibly claims “Alta Mesa never disclosed the aberrant drilling practices or ...