Law360, a legal news publication, recently published an article titled MoneyLion's Woes Draw Del. Suit Against SPAC Insiders. The article concerns the putative class action commenced by Wolf Popper LLP and other counsel on behalf of current and former stockholders of special purpose acquisition company Fusion Acquisition Corp., now renamed MoneyLion Inc. (NYSE: ML). The action arises from Fusion’s September 2021 merger with MoneyLion, a digital financial technology company valued at $2.2 billion.
The complaint filed by Wolf Popper, which follows extensive investigation into MoneyLion’s and Fusion’s corporate books and records, alleges that Fusion’s directors and executive officers and its sponsor (the “Fusion defendants”) labored under conflicts of interest incentivizing them to merge with MoneyLion, even if value-destructive to Fusion’s public stockholders. Plaintiffs assert, among other things, that the Fusion defendants, aided and abetted by MoneyLion’s CEO and co-founder Diwakar (Dee) Choubey and MoneyLion’s financial advisor, Broadhaven Capital Partners, LLC, breached their fiduciary duties when disseminating a false and misleading proxy statement that discouraged Fusion stockholders from redeeming their shares.
The Law360 article reports that the plaintiff-stockholders’ complaint “accused the defendants of entering the deal to avoid liquidation of the SPAC in December 2021 that would have been required if it did not close a business combination within 18 months of its June 2020 initial public offering.” Moreover, Fusion’s shares “were valued at $10 in the merger agreement, but the investors said there was less than $7 in net cash underlying each share.”
The case is Martel et al. v. Fusion Sponsor LLC et al., case number 2024-0329-NAC, in the Delaware Court of Chancery.