On October 26, 2023, Judge Rakoff of the United States District Court for the Southern District of New York granted partial summary judgement in favor of Coherent’s clients, CRCM Institutional Master Fund and CRCM SPAC Opportunity Fund (collectively, “CRCM”), as well as another plaintiff’s breach of contract claim stemming from the refusal by Getty Images (“Getty”) to allow plaintiffs to exchange Getty warrants they held for Getty common stock. Getty became publicly traded after engaging in a business combination with CC Neuberger Principal Holdings II, a special purpose acquisition company (“SPAC”) on July 22, 2022.

CRCM alleged that the Getty warrants it had purchased met all conditions, including registration under the Securities Act on a registration statement on Form S-4, to be exercisable thirty days following the business combination. Getty claimed, among other things, that no registration statement was effective for the “issuance and sale” of the shares underlying the warrants until September 15, 2022, and that the prospectus for those shares was not “current” when CRCM and its co-plaintiff tried to exercise their warrants.

Judge Rakoff ruled in favor of CRCM and its co-plaintiff, stating that their holdings “plainly” met the conditions of the warrant agreement and that Getty’s defense served to “distort the text of the warrant agreement, federal securities laws and Getty’s own contemporaneous representations.”

Coherent Economics was retained by CRCM to calculate damages arising from Getty’s breach. Working with Professor Allen Ferrell, the Greenfield Professor of Securities Law at Harvard Law School, the Coherent team considered several different measures of damages based on the fair market value of Getty’s common stock, including the average between the daily low and high trading prices implying losses of $51 million. Getty’s expert offered a theory that Getty’s stock price was inflated based on “rumors” of a short squeeze. In granting partial summary judgment, Judge Rakoff rejected Getty’s theory and ruled that determining fair market value for a publicly traded stock such as Getty is “straightforward,” in line with CRCM and its co-plaintiff’s position. Moreover, Judge Rakoff noted that “[a]side from Getty’s ‘market value’ argument, which the Court rejects, Getty does not challenge Alta’s or CRCM’s damages calculations for the warrants that each acquired and sought to exercise before the breach.” Judge Rakoff ruled that Getty owes CRCM $51 million in damages plus prejudgment interest at a rate of 9% per annum.

Coherent worked closely with counsel for CRCM, including Michael Rakower, Travis Mock, and Melissa Yang of Rakower Law; Brian Hail from Crowell & Moring; Jay Mandel, Kelly Spatola, and Danielle Rose of Kobre Kim; and William Savitt, Adam Gogolak, and Nate Cullerton of Wachtell Lipton.

The Coherent team included Coherent President Laurel Van Allen, Ian Day, Kelsey Shaw, Dr. Dora Altschuler, Li Wei, Derrick Ding, Kiri Boung, Zach Stephens, and others.