Arrival Investors Seek Green Light for $13.3M Settlement in SPAC Fraud Lawsuit
America ı By Rihem Akkouche
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In a legal battle charged with broken promises and high-voltage ambitions, investors in bankrupt electric vehicle company Arrival SA are now asking a federal judge to sign off on a $13.3 million partial settlement, aiming to resolve claims that the EV startup duped the market with an overly polished vision during its splashy SPAC debut.
The motion, filed Friday in New York federal court, marks a dramatic chapter in the downfall of a company once hailed as a revolution in vehicle manufacturing. According to the filing, the proposed class action settlement includes an $11.3 million cash payout and a $2 million reserve for defense costs that could revert to the fund.
"This is a highly favorable result particularly given the significant risks of continued litigation," wrote attorneys for the plaintiffs, including Mostaco Corp. and named plaintiff Salvatore Fiorellino, represented by The Rosen Law Firm.
From Hype to Bankruptcy: A SPAC Dream Gone Awry
The class includes investors who purchased Arrival shares between November 2020 and November 2021, a period bookended by the SPAC deal with CIIG Merger Corp. and the public scaling back of key production goals.
The lawsuit paints a picture of tech-driven exuberance giving way to manufacturing failure. Arrival’s glowing vision included autonomous AI-powered microfactories and a promise of double-digit profit margins, which investors now allege were built on "knowingly incorrect assumptions."
At the time of the SPAC merger closing in March 2021, Arrival shares were trading at $22.80, more than double their pre-merger price. But the honeymoon didn’t last. The investors allege Arrival’s AI robots never worked, its production estimates were inflated, and even the vehicle materials had to be abandoned for being aesthetically poor.
A “House of Cards” and a Global Fight Over Liability
With Arrival declared bankrupt in May 2024, the proposed $13.3 million settlement becomes even more critical. The investors estimate that the maximum class damages hit $1.1 billion, meaning this recovery represents just 0.10–0.12% of best-case losses. Still, they argue it’s fair in light of Arrival’s collapse and dwindling insurance assets.
Beyond the federal court, similar claims are pending in New York state court and Delaware Chancery Court—and the current deal would also settle those. However, attorneys in the Delaware case may object, citing lack of participation in mediation and potential self-interest.
“The current deal could result in ‘global peace’ regardless of Delaware plaintiffs’ and their counsel’s desire to preserve their action for self-serving reasons,” plaintiffs wrote.
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