Spac Legal Definitionadmin
In July 2007, Pan-European Hotel Acquisition Company N.V. was SPAC`s first offering to be listed on Euronext Amsterdam, raising approximately €115 million. I-Bankers Securities was the underwriter of CRT Capital Group as lead underwriter. , This listing on NYSE Euronext (Amsterdam) was followed by Liberty International Acquisition Company, which raised €600 million in January 2008. Liberty is the third largest SPAC in the world and the largest outside the United States. The first German SPAC was Germany1 Acquisition Ltd., which raised $437.2 million on Euronext Amsterdam with Deutsche Bank and I-Bankers Securities as syndicated banks.   Loyens & Loeff acted as legal advisor in the Netherlands In the event that the proposed takeover does not take place or if the legal formalities are still pending, PSPC is obliged to return the funds to the investors. A PSPC merger typically requires several steps of legal/equity restructuring that affect the tax status and considerations of the target company.  See Press Release No 15. For example, it is common for a subscriber of a PSPC IPO (or its affiliates) to participate in the PSPC transaction as a financial advisor to PSPC and engage in activities necessary to complete the distribution of PSPC, such as assisting in identifying potential targets, negotiating merger terms, or finding investors and negotiating PIPE investments. In addition, the receipt of compensation in connection with the PSPC-De-transaction could constitute a direct or indirect involvement in the PSPC-De-transaction.
The accounting acquirer is the entity that has acquired control of the other entity (i.e. the acquired entity) and may differ from the legal acquirer. If it is determined that the target entity is the accounting acquirer, the transaction is treated in the same manner as a capital raising event (i.e. A reverse recapitalization). If PSPC is determined to be the acquirer on the balance sheet, purchasing accounting is applied and the target`s assets and liabilities must be measured at fair value (i.e., a forward merger). PSPC and the Sponsor (or an affiliate of the Sponsor) enter into an agreement whereby the Sponsor (or the Sponsor`s affiliate) will provide PSPC with office space, utilities, secretarial and administrative services for a monthly fee (generally $10,000 per month). In the rare event that a vote of PSPC shareholders is not required, PSPC is required by its governing documents to make a tender offer to purchase the shares and to file tender offer documents containing substantially the same information as in a proxy statement. Although a shareholder vote is not required by law, PSPC may submit the PSPC transaction to a shareholder vote for commercial reasons. As of 2018, the top five law firms with SPAC IPO legal assignments are Ellenoff Grossman & Schole; Skadden, Arps, Slate, Meagher & Flom; Graubard Miller; Winston and Strawn; and Kirkland & Ellis.  All organization and offering costs will be paid by PSPC from the proceeds of the IPO and the sale of the founder`s founding shares and warrants. These expenses include (modest) legal fees and expenses, printing costs, accounting fees, SEC/FINRA, NASDAQ/NYSE expenses, travel and tour expenses, D&O insurance premiums and other miscellaneous expenses.
Prior to the completion of the IPO, PSPC does not have sufficient cash to pay these fees, so the proponent enters into a promissory note with PSPC to lend funds to PSPC until the end of the PSPC IPO. The promissory note covers all organizational or offering costs until PSPC is able to repay the loan from the proceeds of the IPO and the sale of the founder`s warrants at the end of the IPO. If PSPC raises the necessary funds through an IPO, the money is held in a trust until a predetermined period of time has elapsed or the desired acquisition is made. As a result, a PSPC does not do business, sells anything, and generally only holds the money raised through its own IPO. You may have heard the term PSPC recently in the financial or other news. You can view a PSPC`s power of attorney, information, or tender offer statement in the SEC`s EDGAR database. In addition, shareholders of the former PSPC must hold their equity for a period of twelve months, measured from the filing date of Super 8-K, before they can invoke Rule 144 of the Securities Act. Rule 144 provides a means by which persons who might otherwise be considered “underwriters required by law” (and who are therefore required to register their offer of shares under the Securities Act prior to their public sale) sell their shares without registration, usually after a six-month holding period. 9The financial statements of the target transaction for the final year should be audited “only to the extent possible” and previous years need not be audited if they have not been pre-audited.