The Delaware Supreme Court issued an order in Northern Star Sponsor, LLC v. Kenville on Jan. 15, 2026, addressing an interlocutory appeal in a class action lawsuit that highlights ongoing legal challenges facing Special Purpose Acquisition Companies and their fiduciary obligations to shareholders.
The case stems from a March 2024 class action complaint filed by former stockholders of Northern Star Acquisition Corp. against the SPAC's sponsor and directors. The plaintiffs, Sarah Kenville, Dylan Newman, and Michael Farzad, brought claims for breach of fiduciary duty and unjust enrichment against Northern Star Sponsor LLC and six individual defendants: Joanna Coles, Jonathan J. Ledecky, James H.R. Brady, Jonathan Mildenhall, Debora Spar, and Justine Cheng.
The litigation arose from a de-SPAC merger between Northern Star and Barkbox, Inc., a pet products company that went public through the SPAC transaction. The plaintiffs alleged that the defendants breached their fiduciary duties in connection with the business combination.
The case gained procedural significance in February 2025 when the plaintiffs moved for class certification. The proposed class consists of individuals who held shares of Northern Star Class A common stock as of the May 26, 2021 redemption deadline and who were entitled to, but did not, redeem all of their shares. The class definition also includes successors-in-interest who obtained their shares by operation of law.
After briefing and oral arguments, the Delaware Court of Chancery granted the motion for class certification in a bench ruling. The trial court concluded that the proposed class satisfied all requirements under Court of Chancery Rule 23(a), including numerosity, commonality, typicality, and adequacy. The court also determined that the class could be maintained under Rule 23(b)(1), which allows class actions when prosecuting separate actions would create a risk of inconsistent adjudications or would be dispositive of the interests of other members not parties to the individual adjudications.
The defendants appealed the class certification ruling to the Delaware Supreme Court. The high court's order indicates it considered the notice of interlocutory appeal, supplemental notices, exhibits, and supplemental authority before issuing its decision.
The case represents part of a broader wave of litigation targeting SPAC transactions that has emerged as these investment vehicles have faced increased scrutiny. SPACs, or blank-check companies, raise capital through public offerings with the purpose of acquiring private companies and taking them public. The structure has faced criticism over conflicts of interest, disclosure practices, and the alignment of incentives between sponsors and public shareholders.
Northern Star Acquisition Corp. was a SPAC that completed its initial public offering before ultimately merging with Barkbox, a subscription service for pet products. The May 26, 2021 redemption deadline referenced in the class definition was likely the date by which shareholders could choose to redeem their shares for cash rather than participate in the business combination.
The fiduciary duty claims at the heart of the litigation reflect common allegations in SPAC-related lawsuits. Plaintiffs in such cases often argue that SPAC sponsors and directors prioritized their own financial interests over those of public shareholders when evaluating and approving business combinations. These claims can involve allegations that defendants failed to conduct adequate due diligence, disclosed misleading information, or structured transactions in ways that benefited insiders at the expense of public investors.
The unjust enrichment claims likely relate to compensation and financial benefits that the defendants received in connection with the SPAC transaction. In typical SPAC structures, sponsors receive significant equity stakes and other compensation that can create potential conflicts when evaluating whether to proceed with a business combination.
The Delaware Supreme Court's involvement in the case underscores the significance of class certification decisions in complex commercial litigation. Interlocutory appeals of class certification rulings are relatively rare and typically involve substantial legal or practical questions that warrant immediate appellate review.
The court's order provides limited detail about the specific legal issues addressed or the reasoning behind its decision. The case was submitted to the court on Dec. 2, 2025, and decided by a three-justice panel consisting of Chief Justice Seitz and Justices Valihura and Traynor.
The outcome of this case could have implications for other SPAC-related litigation and may influence how Delaware courts approach class certification in similar cases involving alleged breaches of fiduciary duty in SPAC transactions. The ruling also reflects Delaware's continued role as a key jurisdiction for resolving corporate governance disputes, given that many SPACs and their target companies are incorporated in the state.
The case remains pending in the Delaware Court of Chancery, where it will proceed to address the underlying merits of the fiduciary duty and unjust enrichment claims following the resolution of the class certification issues.