Background
Sheadrick Richards sued Shipwright SPAC I, LLC and related entities and individuals, asserting breach-of-fiduciary-duty and unjust-enrichment claims arising from Collective Growth Corp.’s March 11, 2021 proxy statement. Richards alleged that the proxy was misleading under a net-cash-per-share theory.
Richards filed suit on March 28, 2024. The Court of Chancery dismissed his verified amended complaint because the claims were filed after Delaware’s three-year limitations period expired. Richards appealed, arguing in part that his claims concerned affirmative misstatements rather than omissions.
The Court’s Holding
The Delaware Supreme Court affirmed the dismissal based on the Court of Chancery’s reasoning and the Supreme Court’s June 15, 2026 order in Reilly v. Horn. The court held that Richards’s fiduciary-duty and unjust-enrichment claims accrued when the allegedly misleading proxy statement was distributed on March 11, 2021, making his March 28, 2024 complaint untimely.
The court also held that Richards was on inquiry notice when the proxy was issued because the alleged deficiencies were observable on its face. Although Richards characterized the case as involving affirmative misstatements, the proxy disclosed every fact underlying his net-cash-per-share theory, and an investigation prompted by those deficiencies would have uncovered the remaining information with enough time to sue.
Key Takeaways
- Claims challenging an allegedly misleading SPAC proxy accrued when the proxy was disseminated to stockholders.
- Facially observable proxy deficiencies placed Richards on inquiry notice and prevented tolling beyond the three-year limitations period.
- Labeling the challenged disclosures as affirmative misstatements rather than omissions did not change the result because the proxy contained the facts underlying Richards’s theory.
Why It Matters
The order reinforces that Delaware stockholders must investigate and pursue disclosure-based SPAC claims promptly when the proxy itself reveals facts sufficient to raise suspicion. A plaintiff cannot avoid the limitations bar merely by reframing observable disclosure deficiencies as affirmative misstatements.