Parties involved in a stockholder lawsuit concerning Sports Entertainment Acquisition Holdings, a special purpose acquisition company (SPAC) linked to the sports betting and online gambling sectors, have tentatively agreed to a $12 million settlement. The suit, filed in the Delaware Court of Chancery, alleges that investors were misled about share values and the risks involved in the take-public deal completed in 2022.
The settlement follows mediation efforts led by Robert A. Meyer, a JAMS business litigation mediator, and now awaits court approval, including a yet-to-be-determined plaintiffs’ attorney fee allocation.
The underlying lawsuit centers on claims from investors who purchased stock in the SPAC, which merged with SGHC Ltd., the holding company for sports betting operator Betway and online casino Spin, creating the public entity Super Group Ltd., once valued at $4.75 billion. Plaintiffs assert that SPAC shareholders were led to believe their shares were worth $10 each, while actual value was below $6.72, due to dilution and cash depletion.
Vice Chancellor Lori W. Will previously ruled that the suit raised valid issues regarding shareholders’ ability to assess their stock’s true cash value. Breach of fiduciary duty and unjust enrichment claims are moving forward against key defendants, including former executives John Collins and Eric Grubman, along with Sports Entertainment Acquisition Holdings itself.
“This proposed settlement delivers substantial and immediate benefits to the class while acknowledging the merit of the claims,” said attorneys representing the stockholders.
The case, Newman v. Sports Entertainment Acquisition Holdings LLC et al., Case No. 2023-0538, remains pending in the Delaware Court of Chancery. A hearing to finalize the settlement date has yet to be scheduled.
