SPAC Founders Kept Millions Despite Merger’s Failure, Suit Says

Victory Park Capital Advisors LLC made a deal that allowed it to misappropriate about $50 million when its special purpose acquisition company dissolved without a merger, according to a proposed investor class action.

“Like a typical SPAC,” this one “was structured to be a boom or bust proposition” for Victory Park, the sponsor, which would own 20% of the public part of the combined new company—or lose its entire investment if no merger occurred, an investment fund says in the suit filed Wednesday. The plaintiff, ATG Fund II LLC, filed its complaint in the US District Court for the Southern ...