Robbins Geller Secures $126.3 Million for SPAC Investors

Robbins Geller Rudman & Dowd LLP and co-lead trial counsel from Entwistle & Cappucci LLP secured final approval of a $126.3 million recovery for investors in a case against Alta Mesa – a high-profile and now-bankrupt “special purpose acquisition company” or “SPAC.” The recovery is largest-ever securities fraud class action recovery involving a SPAC.

The settlement came in the midst of a multi-week jury trial involving Alta Mesa Resources, Inc., certain of its officers and directors, and the private equity firm Riverstone Holdings. The trial began in November 2024 in federal court in Houston, Texas. Several defendants, including investment firm HPS Investment Partners, LLC and private equity firm Bayou City Energy Management, LLC, settled with investors just prior to the commencement of the trial.

Alta Mesa, previously known as Silver Run II, was a SPAC sponsored by the private equity firm Riverstone. One of Riverstone’s partners, James T. Hackett, served as CEO of Silver Run II. Beginning in August 2017, Silver Run II and Alta Mesa Holdings’ (“AMH”) CEO, Harlan Chappelle, proposed to purchase and merge two energy companies operating in Oklahoma, AMH and Kingfisher Midstream (“Kingfisher”). Between August 2017 and January 2018, Riverstone and Messrs. Hackett and Chappelle engaged in a proxy roadshow to solicit approval from Silver Run II shareholders for the proposed merger. Plaintiffs’ suit alleges that, to induce shareholders to vote yes on the deal on February 6, 2018, Riverstone, Mr. Hackett, and AMH (together with related executives and other entities) made numerous false and misleading statements to their investors, including earnings projections that overstated the value of AMH and Kingfisher.

Within weeks of approval of the deal, the defendants made a series of downward adjustments to 2018 earnings projections and later admitted that Alta Mesa had been aware of the conditions that led to the adjustments. Only one year after the creation of Alta Mesa, the company had to take a substantial write-down on the business combination and ultimately filed for Chapter 11 bankruptcy protection in September 2019.

Robbins Geller attorneys Trig Smith, Tor Gronborg, John M. Kelley, and Stephen Johnson represent the plaintiffs.

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In re Alta Mesa Resources, Inc. Securities Litigation, No. 4:19-cv-00957 (S.D. Tex.).