Lynk Global fired back in a legal spat with would-be merger target Slam, filing counterclaims against the special purpose acquisition company (SPAC) barely a fortnight after it pressed a court of chancery to hold the direct-to-device satellite player to their arrangement.

The company filed its counterclaim with a US court of chancery in the state of Delaware today (2 July), explaining the details of its argument remain sealed for the time being, though are expected to be released on 7 July.

For the moment, Lynk Global highlighted a Slam shareholder meeting on 25 June in which the holders of 1,885,947 of public shares “properly exercised their right to redeem” in cash.

The decision means “only minimal funds” are still held by Slam, Lynk Global stated, adding the redemption “represents a rate exceeding 99 per cent since Slam’s initial public offering in 2021”.

Lynk Global pledged to “vigorously defend itself against Slam’s meritless claims and will continue to assert its rights under the business combination agreement (BCA)”.

Struggles
Lynk Global and Slam agreed a definitive BCA in February 2024 but have struggled to complete the deal.

Slam was delisted from the Nasdaq stock exchange in August 2024 and began trading in over-the-counter (OTC) stocks.

An uplisting process may therefore have been required for the merged entity to list on the Nasdaq.

In an article published in September 2024, insurance broker Founder Shield explained it could take four weeks to six weeks for any such application to be processed.

Legal fight
Whatever the cause of the spat, Lynk Global moved to terminate the BCA in recent weeks, prompting Slam to file a complaint with the court of chancery on 19 June.

Such courts specialise in settling business disputes.

Slam explained in SEC filings the court agreed to expedite its handling of the litigation against Lynk Global and its parent, referred to as TopCo.

The SPAC asked the court to declare the companies’ termination of the BCA “ineffective” and prevent the satellite player from terminating the arrangement, claiming Lynk Global “breached its obligations under the BCA”.

A second count claims Lynk Global and TopCo “breached the BCA” and sought an order requiring the companies to “perform their obligations” contained in the agreement, “including to consummate the transactions” covered by the deal “when all closing conditions are satisfied”.

In a third count, Slam alleges Lynk Global and TopCo “breached the implied covenants of good faith and fair dealing” contained in the agreement and asked the court to order the companies to proceed under the terms originally decided.

On 6 June, Slam shareholders approved a plan to extend the deadline for completing the BCA from 25 June to 25 July, with up to five further extensions until 24 December agreed without further shareholder input during a series of extraordinary general meetings held during the month.

In an initial response to Slam’s actions issued by Lynk Global last week, it noted the BCA had a termination date of 30 June and stated its “management team and partners remain focussed on strengthening the company’s competitive position and executing its roadmap to deliver direct-to-device (D2D) services globally”.