The US-based law firm, Schulte Roth & Zabel, has initiated a legal battle against one of its former clients, the special purpose acquisition company, 26 Capital Acquisition. A report by Reuters suggests that the law firm is seeking to reclaim almost $2 million worth of unpaid legal fees.
In the report, it was mentioned that Schulte Roth & Zabel has reached out to the Delaware Court of Chancery with a plea to prevent 26 Capital Acquisition from dissolution until all its outstanding debts, including the $1.9 million legal fees (as claimed by Schulte), have been fully cleared.
Last week, 26 Capital revealed its intention to dissolve, a move that would prompt the liquidation of its trust account and the distribution of all its asset holdings to shareholders. However, such a move would hinder Schulte from retrieving its unpaid dues, a point clearly highlighted by the law firm in its legal pursuit.
Schulte Roth & Zabel Seeks Compensation for Services Rendered
To provide some context, Schulte Roth & Zabel functioned as the legal consultant providing counsel to 26 Capital in anticipation of its merger with Okada Manila, a notable casino operator in the Philippines. Had it been successful, the merger would have brought $275 million in revenue to the operator.
However, earlier this month, Vice Chancellor Travis Laster pronounced the court’s decision not to compel Okada Manila to finalize its merger with 26 Capital. He held that 26 Capital had applied undue pressure to secure the agreement, terming it as a “behavior that should not be incentivized.”
Schulte Roth & Zabel, responding to this ongoing litigation, has underscored the necessity for it to be remunerated for the services provided, irrespective of the merger’s unsuccessful culmination with Okada Manila. The firm elucidated this in a formal statement:
Our indisputable right to the compensation we worked hard to earn for the extensive services provided to 26 Capital is stated in the law, and it’s unjust for 26 Capital to execute investor redemptions without making provisions for paying off their creditors.
Schulte is a well-renowned firm with a staff exceeding 300 lawyers, operating across London, New York, and Washington DC. The firm alleges to have invested an excessive number of hours specifically into financial and merger-related tasks for this deal and appropriately seeks compensation.
As per the Reuters report, 26 Capital has not yet shared any commentary regarding the issue.
In separate news, Okada Manila is focusing on enhancing its appeal as a top tourist spot, a strategy following the aftermath of the recent takeover.
