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`Case 1:23-cv-01074-JSR Document 34 Filed 09/11/23 Page 1 of 32
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`UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF NEW YORK
`
`
`CRCM INSTITUTIONAL MASTER FUND
`(BVI) LTD. and CRCM SPAC
`OPPORTUNITY FUND LP,
`
`
`
`
`
`GETTY IMAGES HOLDINGS, INC.,
`
`
`
`
`
`
`
`
`
`
`
`
`-v.-
`
`
`
`
`
`
`
`Plaintiffs,
`
`Defendant.
`
`Civil Action No. 1:23-cv-01074-JSR
`
`Hon. Jed S. Rakoff
`
`
`
`
`
`
`
`MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFFS’
`MOTION FOR SUMMARY JUDGMENT ON COUNTS I AND IV
`
`
`
`
`

`

`Case 1:23-cv-01074-JSR Document 34 Filed 09/11/23 Page 2 of 32
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`
`
`TABLE OF CONTENTS
`
`PRELIMINARY STATEMENT .....................................................................................................1 
`
`BACKGROUND .............................................................................................................................3 
`
`A. 
`
`B. 
`
`C. 
`
`D. 
`
`E. 
`
`F. 
`
`G. 
`
`H. 
`
`I. 
`
`J. 
`
`K. 
`
`The parties ................................................................................................................3 
`
`CCNB goes public ...................................................................................................3 
`
`The Warrant Agreement ..........................................................................................4 
`
`CCNB agrees to combine with Getty, and CRCM begins buying warrants ............5 
`
`The warrant shares are registered on Form S-4 .......................................................5 
`
`The de-SPAC transaction closes, Getty assumes CRCM’s obligations
`under the warrant agreement, and Getty’s stock begins trading publicly ................7 
`
`Getty files a Form S-1 ..............................................................................................7 
`
`CRCM seeks to exercise its warrants, and Getty refuses .........................................8 
`
`With public warrant holders unable to exercise, insiders obtain additional
`equity in the company ..............................................................................................9 
`
`Getty redeems the warrants ....................................................................................10 
`
`This action ..............................................................................................................10 
`
`ARGUMENT .................................................................................................................................11 
`
`I. 
`
`GETTY IS LIABLE FOR BREACHING THE WARRANT AGREEMENT ..................12 
`
`A. 
`
`B. 
`
`C. 
`
`As of August 22, 2022, the condition of an effective registration statement
`with respect to the warrant shares was satisfied ....................................................12 
`
`As of August 22, 2022, the condition of a current prospectus covering the
`warrant shares was satisfied or Getty’s breach caused the failure of the
`condition ................................................................................................................16 
`
`Getty breached the warrant agreement by refusing to permit CRCM to
`exercise its warrants on August 22, 2022 ..............................................................21 
`
`II. 
`
`CRCM IS ENTITLED TO $51 MILLION IN DAMAGES, PLUS INTEREST ..............23 
`
`CONCLUSION ..............................................................................................................................25 
`
`
`
`

`

`Case 1:23-cv-01074-JSR Document 34 Filed 09/11/23 Page 3 of 32
`
`
`
`Cases
`
`TABLE OF AUTHORITIES
`
`Boyce v. Soundview Tech. Grp.,
`464 F.3d 376 (2d Cir. 2006)...............................................................................................23, 24
`
`Celotex Corp. v. Catrett,
`477 U.S. 317 (1986) .................................................................................................................11
`
`Chechele v. Standard General L.P.,
`2021 WL 2853438 (S.D.N.Y. July 8, 2021) ............................................................................15
`
`Consolidated Edison Inc. v. Northeast Utilities,
`426 F.3d 524 (2d Cir. 2005).....................................................................................................18
`
`Cauff, Lippman & Co. v. Apogee Fin. Grp., Inc., 807 F. Supp. 1007, 1022
`(S.D.N.Y. 1992) ......................................................................................................................23
`
`Exchange Listing, LLC v. Inspira Technologies, Ltd.,
`2023 WL 2403223 (S.D.N.Y. March 8, 2023) ........................................................................22
`
`Gaynor v. Miller,
`273 F. Supp. 3d, 848 (E.D. Tenn. 2017) ..................................................................................20
`
`Holland Loader Co., LLC v. FLSmidth A/S,
`313 F. Supp. 3d 447 (S.D.N.Y. 2018), aff’d, 769 F. App’x 40 (2d Cir. 2019) ........................21
`
`In re All. Pharm. Corp. Sec. Litig.,
`279 F. Supp. 2d 171 (S.D.N.Y. 2003) ......................................................................................19
`
`In re Metro. Sec. Litig.,
`2010 WL 537740 (E.D. Wash. Feb. 8, 2010) ..........................................................................20
`
`Iroquois Master Fund Ltd. v. Quantum Fuel Sys. Techs. Worldwide, Inc.,
`No. 13 Civ. 3860, 2014 WL 2800752 (S.D.N.Y. June 17, 2014) ............................................23
`
`Irving Bank Corp. v. Bank of New York Co.,
`692 F. Supp. 172 (S.D.N.Y. 1988)...........................................................................................20
`
`Jamil v. Solar Power Inc.,
`2016 WL 6820725 (S.D.N.Y. Nov. 8, 2016) .....................................................................11, 23
`
`Kooleraire Serv. & Installation Corp. v. Bd. of Ed. of City of New York, 28
`N.Y.2d 101, 106, 268 N.E.2d 782, 784 (N.Y. 1971) ..............................................................18
`
`Maxim Grp. v. Life Partners Holdings,
`690 F. Supp. 2d 293 (S.D.N.Y. 2010) ......................................................................................23
`
`-ii-
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`

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`Case 1:23-cv-01074-JSR Document 34 Filed 09/11/23 Page 4 of 32
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`
`
`Process America, Inc. v. Cynergy Holdings, Inc.,
`839 F.3d 125 (2d Cir. 2016).....................................................................................................23
`
`Remsen Funding Corp. of N.Y. v. Ocean W. Holding Corp.,
`2009 WL 874212 (S.D.N.Y. Mar. 31, 2009) ...........................................................................23
`
`SATCOM Int’l Grp. PLC v. ORBCOMM Int’l Partners, L.P.,
`2000 WL 729110 (S.D.N.Y. June 6, 2000) .............................................................................21
`
`SEC v. Manor Nursing Centers, Inc.,
`458 F.2d 1082 (2d Cir. 1972).............................................................................................19, 21
`
`St. Christopher’s, Inc. v. JMF Acquisitions, LLC,
`2021 WL 6122674 (2d Cir. 2021)............................................................................................18
`
`Statutes, Regulations and Rules
`
`15 U.S.C. § 77aa ............................................................................................................................17
`
`15 U.S.C. § 77j(a) ..........................................................................................................................17
`
`15 U.S.C. § 78j(b) ..........................................................................................................................11
`
`17 C.F.R. § 229.512(a)...................................................................................................................20
`
`17 C.F.R. § 229.601(b)(5) ..............................................................................................................13
`
`17 C.F.R. § 230.401(g)(1) ........................................................................................................15, 16
`
`17 C.F.R. § 230.411(a)...................................................................................................................19
`
`17 C.F.R. § 230.424(b)(3) ............................................................................................18, 19, 20, 21
`
`Fed. R. Civ. P. 56(a) ......................................................................................................................11
`
`N.Y. C.P.L.R. § 5001 .....................................................................................................................24
`
`Other Authorities
`
`Adoption of Integrated Disclosure System,
`SEC Release No. 33-6383, 47 Fed. Reg. 11395-96 (Mar. 3, 1982) ........................................20
`
`SEC, Division of Corpoarate Finance, Compliance and Disclosure Interpretations,
`Securities Act Sections, Question 139.01 ..........................................................................14 n.5
`
`Max H. Bazerman & Paresh Patel, SPACs: What You Need to Know .......................................3 n.1
`
`Restatement (Second) of Contracts § 245 & Illustration 3 (1981) ..........................................21, 22
`
`-iii-
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`

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`Case 1:23-cv-01074-JSR Document 34 Filed 09/11/23 Page 5 of 32
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`
`
`SEC Manual of Publicly Available Telephone Act Interpretations,
`1997 WL 34499678 (July 1, 1997) .........................................................................................14
`
`SEC, Division of Corpoarate Finance, Compliance and Disclosure Interpretations,
`Securities Act, Rules C&DI 212.07 ...................................................................................19 n.8
`
`Securities Regulation & Law Report,
`43 SRLR 273 (Feb. 7, 2011) ..............................................................................................18 n.7
`
`Stephen M. Goodman, “Practice Tip: Use Stickers to Reflect Material Changes in
`a Form S-1 Resale Registration Statement,” ......................................................................18 n.7
`
`-iv-
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`

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`Case 1:23-cv-01074-JSR Document 34 Filed 09/11/23 Page 6 of 32
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`
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`PRELIMINARY STATEMENT
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`Getty Images became an NYSE-listed company in July 2022. Among Getty’s publicly
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`traded securities were warrants, governed by a binding Warrant Agreement, that could be
`
`converted into shares of Getty common stock. The warrants carried a strike price of $11.50 per
`
`share, and so were only valuable if Getty shares traded above $11.50 at the time of exercise.
`
`Investors purchased Getty’s warrants in the hope that Getty’s shares would trade above $11.50, in
`
`which case the warrants could be exercised at a profit. Getty insiders were granted millions of
`
`private warrants too, with the same $11.50 strike price.
`
`As it turned out, Getty’s shares did trade above $11.50, in August and September 2022.
`
`Company insiders exercised their private warrants, and obtained shares worth tens of millions of
`
`dollars. CRCM, the plaintiff here, tried to exercise its warrants in the same period—but Getty
`
`refused to honor the exercise and took multiple steps that rendered exercise by public warrant holders
`
`impossible. Along with Getty’s other public warrant holders, CRCM was left to sell its warrants
`
`at a substantial loss.
`
`To justify its conduct, Getty contends that certain conditions to the right of public warrant
`
`holders to exercise their warrants were unsatisfied when CRCM sought to exercise its warrants.
`
`But, as set forth in the Warrant Agreement, the satisfaction of only two relevant conditions was
`
`required before CRCM could exercise its warrants: (1) a “registration statement under the
`
`Securities Act with respect to” the shares underlying the warrants had to be “effective”; and (2) a
`
`“prospectus relating thereto” had to be “current.” Rule 56.1 Statement (“Stmt.”) ¶ 17; Ex. 1
`
`§ 3.3.2. With discovery now complete, no genuine issue of material fact remains to be tried as to
`
`either one:
`
`(1)
`
`The record established that Getty filed a “registration statement under the Securities
`
`Act” on Form S-4 that was declared “effective” by the SEC on June 30, 2022. And the evidence
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`
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`

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`Case 1:23-cv-01074-JSR Document 34 Filed 09/11/23 Page 7 of 32
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`
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`shows that the Form S-4 was a registration statement “with respect to” not only the warrants but
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`also the shares underlying the warrants. The S-4’s cover page made clear that the S-4 registered
`
`the Getty shares “underlying warrants” that were “issuable upon exercise.” Stmt. ¶ 33; Ex. 5 at *2
`
`n.6. Indeed, Getty was required to register those shares pursuant to published SEC guidance, which
`
`provides that where, as here, warrants are exercisable within one year, the shares underlying those
`
`warrants must be registered at the same time as the warrants themselves. Getty complied with this
`
`guidance by registering both the warrants and the warrant shares on the S-4. See Point I.A.
`
`(2)
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`The record likewise demonstrates that Getty had no lawful basis to refuse to permit
`
`CRCM to exercise the warrants on the ground that the “prospectus” relating to the shares
`
`underlying the warrants was not current when CRCM sought to exercise its warrants. When the
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`S-4 went effective, the prospectus was “current”—that is, it contained all of the information
`
`required by the federal securities laws—as a matter of law. The Warrant Agreement expressly
`
`required Getty to maintain that prospectus current, precisely so that holders could exercise their
`
`warrants. Getty cannot now claim that it escaped the obligation to honor CRCM’s exercise of its
`
`warrants on the ground that the prospectus was not “current”—both because the evidence refutes
`
`that assertion, and because any failure of currentness of the prospectus was the result of Getty’s
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`breach of contract, which Getty cannot invoke to its benefit, as a matter of law. See Point I.B.
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`CRCM is likewise entitled to summary judgment on the issue of damages. Under settled
`
`case law, damages for breach of a contract preventing a warrant holder from exercising its warrants
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`are measured by the difference between the strike price of the warrants and the average public
`
`market price of the stock that the holder should have received on the date of the breach, plus out-
`
`of-pocket losses. Applying that straightforward rule here, the record evidence establishes that
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`CRCM is entitled to $51 million in damages, plus interest. See Point II.
`
`-2-
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`

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`Case 1:23-cv-01074-JSR Document 34 Filed 09/11/23 Page 8 of 32
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`A.
`
`The parties
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`BACKGROUND
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`Plaintiffs CRCM Master Fund and CRCM SPAC Fund (collectively, “CRCM”) are
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`investment funds managed by CRCM, L.P. Stmt. ¶ 3. Defendant Getty is a self-described “global
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`visual content creator and marketplace.” Getty became a public company in 2022 when it merged
`
`with CC Neuberger Principal Holdings II (“CCNB”). Stmt. ¶ 1.
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`B.
`
`CCNB goes public
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`CCNB was formed as a special purpose acquisition company (SPAC) by its sponsor CC
`
`Neuberger Principal Holdings II Sponsor LLC. Stmt. ¶ 7. A SPAC is a corporation created to
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`allow a private company to access the public capital markets while bypassing a traditional IPO.1
`
`A SPAC raises cash by offering shares to the public in an IPO—it goes public as a “blank check”
`
`company that is essentially a pool of cash looking for a private company partner. The SPAC then
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`identifies and merges with a non-public target company in a business combination, commonly
`
`called a “de-SPAC” merger. By virtue of the de-SPAC merger, the SPAC ceases to exist, and the
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`target company accesses the SPAC’s capital and becomes a public company.
`
`CCNB went public as a SPAC through an IPO on August 4, 2020, raising $828,000,000
`
`from the sale of 82,800,000 “units” at a price of $10.00 per unit. Stmt. ¶ 9. Each unit comprised,
`
`and was separable into, one Class A ordinary share of CCNB and one-fourth of one CCNB warrant.
`
`Stmt. ¶¶ 10-11. In connection with the IPO, CCNB also issued 18,560,000 private warrants to its
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`sponsor. Stmt. ¶ 12. Following the IPO, CCNB’s Class A ordinary shares and public warrants
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`each traded on the NYSE. Stmt. ¶ 13.
`
`
`1 See generally Max H. Bazerman & Paresh Patel, SPACs: What You Need to Know, HARV. BUS.
`REV. MAG. (July-Aug. 2021), available at https://hbr.org/2021/07/spacs-what-you-need-to-know.
`
`-3-
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`

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`Case 1:23-cv-01074-JSR Document 34 Filed 09/11/23 Page 9 of 32
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`C.
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`The Warrant Agreement
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`The warrants were issued pursuant to a warrant agreement governed by New York law and
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`dated August 4, 2020 (the “Warrant Agreement”). Stmt. ¶ 14; Ex. 1 ¶ 9.3. The Warrant Agreement
`
`provided each warrant holder the right to purchase a CCNB share at an exercise price of $11.50
`
`per share. Stmt. ¶ 15; Ex. 1 § 3.1.
`
`Section 3.2 of the Warrant Agreement provides that the CCNB warrants can be exercised
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`on a date “that is thirty days after the first date on which the Company completes a [de-SPAC
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`business combination] . . . subject to the satisfaction of any applicable conditions, as set forth in
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`subsection 3.3.2 below with respect to an effective registration statement.” Stmt. ¶ 16; Ex. 1 § 3.2.
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`Section 3.3.2 sets out the two “applicable conditions” that must be satisfied before warrants
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`may be exercised: (1) a registration statement “with respect to” the shares underlying the warrants
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`must be effective, and (2) the prospectus relating to the warrant shares must be current:
`
`[T]he Company shall not be obligated to deliver any Ordinary Shares pursuant to
`the exercise of a Warrant and shall have no obligation to settle such Warrant
`exercise unless a registration statement under the Securities Act with respect to the
`Ordinary Shares underlying the Public Warrants is then effective and a prospectus
`relating thereto is current, subject to the Company’s satisfying its obligations under
`Section 7.4, or a valid exemption from registration is available.
`
`Stmt. ¶ 17; Ex. 1 § 3.3.2 (emphasis added)
`
`Section 7.4.1 of the Warrant Agreement obligates CCNB to use “commercially reasonable
`
`efforts” to promptly file a registration statement for the warrant shares, to cause that registration
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`statement to become effective, and to keep current any prospectus relating thereto:
`
`The Company agrees that as soon as practicable, but in no event later than twenty
`(20) Business Days after the closing of its initial Business Combination, it shall use
`commercially reasonable efforts to file with the Commission a registration
`statement for the registration, under the Securities Act, of the Ordinary Shares
`issuable upon exercise of the Warrants. The Company shall use commercially
`reasonable efforts to cause the same to become effective within sixty (60) Business
`Days after the closing of its initial Business Combination and to maintain a current
`
`-4-
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`

`

`Case 1:23-cv-01074-JSR Document 34 Filed 09/11/23 Page 10 of 32
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`
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`prospectus relating thereto until the redemption or expiration of the Warrants in
`accordance with the provisions of this Agreement.
`
`Stmt. ¶ 21; Ex. 1 § 7.4.1.
`
`D.
`
`CCNB agrees to combine with Getty, and CRCM begins buying warrants
`
`On December 10, 2021, CCNB announced an agreement to combine with Griffey
`
`Holdings, Inc., Getty’s holding company, with Getty surviving as a public company. Stmt. ¶ 24;
`
`Ex. 3 at 2.
`
`Believing that Getty shares might appreciate after the de-SPAC merger closed, CRCM
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`SPAC and CRCM Master invested in CCNB public warrants. Stmt. ¶ 29. By February 14, 2022,
`
`CRCM SPAC and CRCM Master held 365,141 and 1,036,470 warrants, respectively. Id.
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`E.
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`The warrant shares are registered on Form S-4
`
`
`
`On January 18, 2022, CCNB, through its newly-formed merger subsidiary Vector Holding,
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`filed a registration statement under the Securities Act of 1933 on Form S-4. Stmt. ¶ 30. The S-4
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`included a proxy statement/prospectus, which served as both a proxy statement for the vote of
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`CCNB’s stockholders on the business combination, and a prospectus for the shares to be registered
`
`in connection with the business combination. Stmt. ¶ 39; Ex. 5 at *3.2 The S-4 referred to Getty
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`and Getty’s stock, as they would exist after the de-SPAC business combination, as “New CCNB”
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`and “New CCNB Class A common stock,” respectively. See Stmt. ¶ 34; Ex. 5 at *1 nn.1-2.
`
`The registration fee table on the S-4’s cover page set forth “Each Class of Securities to be
`
`Registered,” as well as the fee to be paid to register those securities. Stmt. ¶ 32; Ex. 5 at *1. These
`
`securities included the shares underlying the warrants, referred to as “New CCNB Class A
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`Common Stock underlying warrants”:
`
`
`2 Page numbers proceeded by an asterisk refer to the PDF page number of the exhibit, excluding
`the exhibit cover page.
`
`-5-
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`

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`Case 1:23-cv-01074-JSR Document 34 Filed 09/11/23 Page 11 of 32
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`Stmt. ¶ 32; Ex. 5 at *1.
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`In the notes accompanying the fee table, CCNB reiterated that the common stock
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`“underlying the warrants” “represent[ed] 39,260,000 shares of New CCNB Class A Common
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`Stock, issuable upon exercise by holders of New CCNB Warrants following the completion of the
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`Business Combination.” Stmt. ¶ 33; Ex. 5 at *2 n.6. CCNB repeated this information in Exhibit
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`107 to the Form S-4/A filed on April 22, 2022. Stmt. ¶ 35; Ex. 6 at Exhibit 107.
`
`On June 27, 2022, CCNB filed an amended S-4 in response to SEC staff comments. Stmt.
`
`¶ 36. In compliance with Item 601(b)(5) of Regulation S-K, the amended S-4 included an opinion
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`rendered by CCNB’s counsel, Kirkland & Ellis, addressing the legality and validity of the
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`securities to be registered on the S-4. Id.; Ex. 7 at 2. The opinion stated that it was “being rendered
`
`in connection with the registration under the above-referenced Registration Statement [the Form
`
`S-4] of . . . 39,260,000 Warrant Shares.” Stmt. ¶ 37; Ex. 7 at 2.
`
`The prospectus included in the S-4 made clear to investors that it covered the warrant
`
`shares. Its cover page stated that it was a “PROSPECTUS FOR 189,735,093 SHARES OF CLASS
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`A COMMON STOCK.” Stmt. ¶ 39; Ex. 5 at *3. The registration fee table on the cover page of
`
`the S-4 likewise provided that 189,735,093 shares of Class A common stock were being registered
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`on the S-4. Stmt. ¶ 32; Ex. 5 at *1. These shares included the 39,260,000 shares underlying the
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`private and public warrants. Stmt. ¶¶ 32-33; Ex. 5 at *1.
`
`-6-
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`

`

`Case 1:23-cv-01074-JSR Document 34 Filed 09/11/23 Page 12 of 32
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`
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`On June 30, 2022, the SEC declared the Getty Form S-4 effective. On July 1, 2022 Getty
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`filed a final proxy statement/prospectus for the CCNB shareholder vote on the de-SPAC transaction
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`and for the newly-registered Getty securities. Stmt. ¶¶ 40-41.
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`F.
`
`The de-SPAC transaction closes, Getty assumes CRCM’s obligations under
`the warrant agreement, and Getty’s stock begins trading publicly
`
`The de-SPAC merger closed on July 22, 2022. Stmt. ¶ 42. In connection with the closing,
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`Getty assumed all of CCNB’s rights, liabilities, and obligations under the Warrant Agreement. Stmt.
`
`¶ 43. As of the closing, the public and private warrants therefore became exercisable for shares of
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`Getty rather than CCNB stock, with the exercise price remaining $11.50 per share. Stmt. ¶ 44. On
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`July 25, 2022, Getty’s stock began trading on the NYSE, opening at $9.39 per share. Stmt. ¶ 47.
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`Getty’s stock price increased substantially in the following days. By August 2, 2022 it was
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`trading above $33 per share, more than $20 above the warrants’ exercise price. Stmt. ¶ 50; see
`
`also id. ¶¶ 51-52. As a result, CRCM began to consider exercising its warrants. Stmt. ¶ 53.
`
`Numerous other Getty warrant holders likewise began to inquire with the company about when
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`the warrants would be exercisable. Stmt. ¶ 54.
`
`G.
`
`Getty files a Form S-1
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`On August 9, 2022, Getty filed a registration statement on Form S-1. Stmt. ¶ 55. On the
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`S-1, Getty registered for the first time certain Getty securities that had not been registered on the
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`Form S-4. Stmt. ¶ 56. These newly-registered securities included shares that had been issued to
`
`former Getty stockholders in the business combination, privately placed shares that had been
`
`issued to fund the business combination through a PIPE transaction and through forward
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`subscription and backstop agreements with the SPAC sponsor’s affiliates, and the secondary
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`offering of the private placement warrants. Stmt. ¶ 57; see also Ex. 14 at 3-4 (discussing closing
`
`of PIPE, forward subscription, and backstop transactions).
`
`-7-
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`

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`Case 1:23-cv-01074-JSR Document 34 Filed 09/11/23 Page 13 of 32
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`
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`Upon effectiveness of the S-1, Getty also transferred the registration of the shares of Getty
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`Class A common stock issuable upon exercise of the public warrants from the S-4 to the S-1. Stmt.
`
`¶ 59; Ex. 20 at Exhibit 107 n.5. The S-1 disclosed that these “39,260,000 shares of Class A
`
`Common Stock [were] previously registered on a registration statement on Form S-4” and were
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`“being transferred from the [S-4] pursuant to Rule 429(b) under the Securities Act.” Stmt. ¶ 59;
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`Ex. 20 at Exhibit 107 n.5. Because the registration of the warrant shares was transferred from a
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`previous registration statement, Getty was not obligated to pay a new fee to include the registration
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`of the warrant shares on the S-1. Stmt. ¶ 59; Ex. 20 at Exhibit 107 n.5. Consolidating the
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`registration of the warrant shares with that of the newly registered securities on one registration
`
`statement allowed for continuous offering and sale of those securities on one prospectus. Ex. 51
`
`¶ 44. Until the S-1 became effective, however, and at all times relevant to this motion, the S-4
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`registration statement covering the warrant shares remained effective.
`
`H.
`
`CRCM seeks to exercise its warrants, and Getty refuses
`
`Beginning on August 12, 2022, CRCM contacted Getty to confirm that its warrants would
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`become exercisable on August 22, one month after the de-SPAC transaction closed, in accordance
`
`with the Warrant Agreement. Stmt. ¶¶ 62, 64-65, 69. Getty told CRCM that the warrants would not
`
`be exercisable until the later of August 22, or the date the SEC declared effective the Form S-1.
`
`Stmt. ¶¶ 63, 70. Id. Morgan Stanley, CRCM’s prime broker, asked the warrant depository for
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`exercise instructions, but no information was available. Stmt. ¶ 66.
`
`On August 22, 2022, Getty’s stock opened at $30.63. Stmt. ¶ 72. On that date, CRCM
`
`SPAC and CRCM Master held 365,141 and 2,600,000 warrants, respectively. Stmt. ¶¶ 73-74. The
`
`Form S-4 covering the warrant shares was effective on that date. To execute its trading strategy,
`
`CRCM instructed Morgan Stanley to contact the warrant agent to exercise the warrants. Stmt.
`
`¶ 76. Morgan Stanley then reached out to the agent, American Stock. Stmt. ¶ 77. Getty instructed
`
`-8-
`
`

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`Case 1:23-cv-01074-JSR Document 34 Filed 09/11/23 Page 14 of 32
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`
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`American Stock to tell Morgan Stanley that the warrants could not be exercised because the Form
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`S-1 was not effective. Stmt. ¶ 77. CRCM was therefore unable to exercise the warrants on that
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`date. Stmt. ¶ 80.
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`I.
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`With public warrant holders unable to exercise, insiders obtain additional
`equity in the company
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`By August 25, Getty’s stock price had stayed above $17.50 for 20 consecutive trading days.
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`Stmt. ¶ 84. This triggered a provision in the business combination agreement entitling certain pre-
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`closing stockholders of Getty—including Getty’s founder, Mark Getty, and entities affiliated with
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`his family—to receive, for no additional consideration, tens of millions of additional “earnout”
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`shares of Getty stock. Stmt. ¶¶ 28, 84. These earnouts were triggered if, for 20 of 30 consecutive
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`trading days, Getty’s volume-weighted average market price was greater than or equal to $12.50 for
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`a first earnout, $15.00 for a second earnout, and $17.50 for the third earnout. Stmt. ¶ 28; Ex. 8 at A-
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`37. All three earnouts were met as of August 25 and, as a result, Getty issued 59,000,000 shares,
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`then valued at over $1.5 billion, to Getty insiders. Stmt. ¶¶ 84-85.
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`CCNB’s sponsor also took advantage of Getty’s market price—on August 29, 2022, it
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`exercised all of its private placement warrants on a cashless basis for 11,555,996 shares of Getty
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`common stock. Stmt. ¶¶ 86-87. So long as the private placement warrants were held by the SPAC
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`sponsor or a permitted transferee, the warrants could be exercised on a “cashless” basis, i.e., by
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`surrendering the warrants for an amount of common shares with a value equal to the value of the
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`underlying shares net of the exercise price. Stmt. ¶ 18; Ex. 1 § 3.3.1(c).
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`Soon thereafter, Getty’s stock price declined, from $29.05 on August 24 to $14.42 on
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`September 1. Stmt. ¶ 88. On September 2, 2022, a CRCM representative contacted Getty to
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`request that CRCM be permitted to exercise its warrants on a cashless basis, as the insiders had
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`-9-
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`

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`Case 1:23-cv-01074-JSR Document 34 Filed 09/11/23 Page 15 of 32
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`
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`done. Stmt. ¶ 89. Getty refused. Id. CRCM sold most of its warrants over the subsequent days
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`at prices ranging from $.48 to $1.24 per warrant, suffering a large investment loss. Stmt. ¶ 90.
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`J.
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`Getty redeems the warrants
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`Under the warrant agreement, Getty had the right to redeem public warrants if, at any time
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`after they became exercisable and before they expired, the closing price of Getty’s common stock
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`was at least $18.00 per share for any 20 trading days in the prior 30 trading days. Stmt. ¶ 20; Ex. 1
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`§ 6.1. In its S-4, Getty disclosed that these redemption criteria were designed to prevent a redemption
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`unless there existed at the time of the call a significant premium to the warrant exercise price. Stmt.
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`¶ 95; Ex. 8 at 315. The criteria were thus structured to allow Getty to simplify its capital structure
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`by redeeming the warrants, while protecting warrant holders from an opportunistic redemption.
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`On September 15, 2022, the SEC declared the S-1 effective, and Getty for the first time
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`allowed public warrant holders to exercise their warrants. Stmt. ¶ 91. For all of August, Getty’s
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`stock price had traded above $18 per share. Ex. 13. By the open of trading on September 16,
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`however, Getty’s stock price had dropped below the warrants’ $11.50 exercise price. Stmt. ¶ 92.
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`Two trading days later, on September 19, Getty notified warrant holders that it was redeeming all
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`outstanding warrants for $0.01 each, Stmt. ¶ 94, even though the warrants were trading not at a
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`significant premium but rather at a discount to the exercise price. Between September 19, 2022
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`and October 18, 2022, the date of redemption, Getty’s stock price never again traded at or above
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`the warrants’ exercise price. Stmt. ¶ 97.
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`K.
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`This action
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`On October 19, 2022, Alta Partners, LLC, another Getty warrant holder, filed a complaint
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`that alleged that Getty breached the Warrant Agreement by, among other things, refusing to allow
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`Alta to exercise its warrants on August 22. Dkt 1. CRCM sued on similar grounds on February 8,
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`-10-
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`Case 1:23-cv-01074-JSR Document 34 Filed 09/11/23 Page 16 of 32
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`
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`2023. Civ. No. 23-CV-01074, Dkt. 1. On February 17, the Court consolidated the two actions
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`through the close of discovery. Dkt. 19.
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`On March 23, CRCM filed an Amended Complaint, Dkt. 27, claiming that Getty breached
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`the Warrant Agreement by refusing to allow CRCM to exercise the warrants (Count I), failing to
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`properly and timely register the warrant shares on the S-4 (Count III), and failing to keep the
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`prospectus in the S-4 current (Count IV). CRCM also claimed that Getty breached the implied
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`covenant of good faith and fair dealing (Count II) and violated the federal securities laws (Counts
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`V, VI, and VII). Getty answered on April 3. Dkt. 28. CRCM now moves for summary judgment
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`on two of its breach of contract claims (Counts I and IV).
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`ARGUMENT
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`The elements of a breach of contract claim under New York law are: “(i) the formation of
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`a contract between the parties; (ii) performance by the plaintiff; (iii) failure of defendant to
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`perform; and (iv) damages.” Jamil v. Solar Power Inc., 2016 WL 6820725, at *3 (S.D.N.Y. Nov.
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`8, 2016) (Rakoff, J.). Because the Warrant Agreement is unambiguous and “there is no genuine
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`dispute as to any material fact” necessary to establish Getty’s breach of that agreement, CRCM “is
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`entitled to judgment as a matter of law” on Counts I and IV. Fed. R. Civ. P. 56(a); see Celotex
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`Cor