Moelis and Others Still in the Hot Seat — But Some Walk Free
Vice Chancellor Will dismissed aiding and abetting claims against Archer Aviation, Atlas Crest Investment LLC, and others, citing a lack of “well-pleaded” evidence. “Without any allegations about how Moelis controlled diligence or the negotiation process,” she said, “there’s nothing to support” such claims.
However, Moelis & Co., Atlas Crest, and Moelis himself remain exposed to breach of fiduciary duty and unjust enrichment claims. The court accepted the plaintiffs’ argument that critical disclosures were missing, depriving investors of the information needed to make informed redemption decisions.
The case invokes the Chancery Court’s “entire fairness” doctrine, its most rigorous legal standard — requiring both a fair price and process when controllers are involved in contested deals.
A Proxy Statement or a “Treasure Hunt”?
The vice chancellor was particularly skeptical of the defense’s implication that investors could have deduced the aircraft’s limitations. “A proxy statement is not meant to be a treasure hunt,” she noted, underscoring the expectation for clarity and transparency.
Dismissed from the case was Todd Lemkin, a former Archer board member. While the plaintiffs tried to tie him to the sponsor, the court ruled that any such connection was “too tenuous.”
