Stowe, Vermont--(Newsfile Corp. - March 16, 2026) - Morris Kandinov LLP has announced an investigation of M3-Brigade Acquisition V Corp. (NASDAQ: MBAV) ("MBAV" or the "Company") and the Company's officers and directors, its sponsor MI7 Sponsor, LLC ("MI7" or the "Sponsor"), and Cantor Fitzgerald & Co. ("Cantor") for breaches of fiduciary duty, self-dealing, and other violations of law in connection with the proposed business combination between MBAV and ReserveOne, Inc. ("ReserveOne"), a digital asset treasury company created and controlled by CC Capital Partners, LLC ("CC Capital"), which also controls the Sponsor. The SPAC and its public stockholders have been significantly harmed by this insider dealing and stand to gain nothing through the proposed transaction.

Background

MBAV is a SPAC organized as a Cayman Islands exempted company that completed its IPO in August 2024, raising approximately $287.5 million in public capital. The Company was originally sponsored by M3-Brigade Sponsor V LLC, an entity formed by executives of Brigade Capital Management, LP (a credit-focused fund with approximately $27 billion in AUM) and M3 Partners, LP (a restructuring advisory firm). The original registration statement marketed the SPAC as targeting the "energy sector in North America" with companies having enterprise values of at least $1 billion. The prior SPACs sponsored by M3-Brigade had completed similar business combinations. The SPAC's prospectus made no reference to digital assets.

The Sponsor Change and Self-Dealing Transaction Less Than Two Months Later

In May 2025, a series of transactions fundamentally altered the Company's direction for public stockholders. The original sponsor sold all Class B founder shares and private placement warrants to MI7 Sponsor, LLC—an affiliate of CC Capital, beneficially owned by Chinh Chu—for $6.5 million. On the same date, the management team was replaced with Chu as President of the Company and Reeve Collins (co-founder of Tether) as Chief Executive Officer, and Mohsin Meghji was removed as Executive Chairman but remained as non-executive Chairman. Frederick Arnold resigned from the board on May 21, 2025, and Thomas Fairfield and Edward Murphy were appointed by CC Capital as new directors on May 27, joining only one carryover director, Benjamin Fader-Rattner. On June 13, 2025, CC Capital expanded the board from five to seven members with the addition of Paul Kopsky and Franklin Tsung. Thus, four of the seven current directors were appointed by CC Capital in connection with the Sponsor's takeover.

ReserveOne, Inc. was incorporated under the laws of the State of Delaware on May 27, 2025—the same day as the sponsor changeover—and has no operating history, historical financial statements, or revenue. Less than two months after the sponsor change, on July 7, 2025, MBAV disclosed a business combination agreement with this newly formed shell entity along with a $500 million equity PIPE transaction and $250 million in convertible note PIPE commitments to support the transaction. The timing of these disclosures makes it clear that the ReserveOne transaction was pre-arranged before MI7 acquired control of the SPAC, meaning the SPAC entity had been commandeered from the outset as a vessel to merge with the Sponsor's newly formed affiliate.

The Company's governing documents prohibit it from consummating a business combination with any entity affiliated with an insider unless (i) the Company obtains an independent fairness opinion and (ii) a majority of the Company's disinterested independent directors approve the transaction. According to the Proxy Statement, the Company formed a special committee on May 27, 2025, consisting of Thomas Fairfield (chairman), Edward Murphy, and Benjamin Fader-Rattner—i.e., the majority of the committee consisted of CC Capital appointees.

On May 30, 2025, the conflicted special committee retained conflicted legal counsel at Troutman Pepper Locke LLP, which disclosed that it also serves as counsel for CC Capital and its affiliates.

On June 11, 2025, the special committee retained Lincoln International LLC as its financial advisor, and immediately created a conflict of interest by structuring a fee of approximately $550,000, part of which was deferred to the closing or termination, creating an incentive to work quickly and narrowly in support of the current transaction. Consistent with that financial incentive, less than a month later, on July 7, 2025, Lincoln delivered an opinion to the special committee that the share consideration in the proposed transaction was fair to public stockholders from a financial point of view. The opinion, which is erroneous for numerous reasons given the market conditions discussed below, disregarded material terms of the transaction, including the dual-class voting structure post-transaction, the Sponsor's earnout, the proposed Administrative Services Agreement, and other insider-favorable arrangements discussed below. Moreover, Lincoln performed no analysis of potential alternative business combinations and, because ReserveOne had no operating history and no financial projections were available, could not perform a discounted cash flow or other income-based valuation, relying instead solely on a market-based approach using three purportedly comparable companies—MicroStrategy, Twenty One Capital, and ProCap Financial. MicroStrategy, the flagship digital asset treasury company, is a multi-billion dollar enterprise with years of operating history and an established software business, bearing no resemblance to a newly formed shell with no history or scale. The other two comps demonstrate why the transaction is unfair to public stockholders and will be value destructive. Twenty One Capital completed its deSPAC in December 2025. It now trades at approximately $6.82 per share. ProCap Financial is worse: it also completed a deSPAC transaction in December 2025 but now trades at approximately less than $3 per share—a 73% loss from its IPO price.

Notwithstanding the above, on July 7, 2025, the special committee purportedly "determined that the Business Combination Agreement, the Business Combination and the other transactions contemplated thereby are fair to, advisable and in the best interests of the Public Shareholders."

The Transaction Is A Dumpster Fire That Extracts Value Solely for CC Capital

The proposed business combination will convert Class A shares into shares of a digital asset treasury company at a time when the market for DATs has fundamentally deteriorated and losses are guaranteed. The net asset value ("NAV") premium that briefly made digital asset treasury strategies attractive has disappeared. For example, even MicroStrategy saw its NAV premium collapse from a peak of 2.3x to just 1.1x over the course of 2025. The vast majority of other DATs are heavily discounted. Sol Strategies, for example, saw its share price plummet from the $12–$13 range to below $2.30 during the same period. It now trades well below $2. The proliferation of crypto treasury ETFs has further diminished the fundamental rationale for DAT structures, as investors can now achieve the same cryptocurrency exposure through low-cost exchange-traded funds without the dilution, management fees, and governance risks inherent in DATs.

The ReserveOne transaction is structured so that shares will trade below NAV from the outset. Even with zero redemptions by public stockholders, the pro forma NAV per share of the combined entity is approximately $8.39—well below the $10.00 IPO price at which Class A stockholders purchased their shares. ReserveOne shares would need to trade up to nearly a 20% premium to reach the $10.00 per share level—an impossible outcome under current market conditions. ProCap Financial and Twenty One Capital provide clear indications as to the immediate and substantial losses that ReserveOne will incur on the first trading day following closing.

The only conceivable rationale for this transaction derives from the Sponsor's extraordinary financial interests, which are not shared by public stockholders. The Sponsor's founder shares, which it acquired for $6.5 million, would convert to approximately 8 million shares of Class A common stock and up to 12.6 million of Class B common stock in the post-transaction company. Even if the post-merger price were to decline by 50%—to around $5 per share—the Sponsor's shares would still be worth in excess of $100 million, reflecting a return of more than 15x in less than a year.

In addition to the holdings above, on June 16, 2025—three weeks before the BCA was signed—the Sponsor obtained a convertible promissory note from the Company allowing it to convert up to $1.5 million in principal into warrants at $1.50 each—a strike price that might actually be profitable even after the Company's precipitous losses post-closing. On July 16, 2025, an amendment was filed to "correct a scrivener's error," further reducing the conversion price to $1.00 per warrant and increasing the Sponsor's potential warrant allocation to 1.5 million. It is notable that, in addition to these warrants, the Sponsor also acquired all of the private placement warrants previously issued to Cantor, the Company's underwriter. However, those warrants are exercisable at $11.50 per share—in other words, they are never likely to have value—and, tellingly, Cantor sold the entire lot for $10.

The Sponsor's economics are rivaled only by Cantor's, which has conflicts that are equally stark and financial interests equally tied to closing the transaction as structured. Cantor is owed a deferred underwriting commission of $13.4 million payable only upon consummation of a business combination. If no deal closes, Cantor forfeits the entire amount. In addition to the deferred commission, Cantor stands to earn up to $11.25 million in PIPE placement agent fees and a warrant exercise fee equal to 1.5% of the aggregate gross proceeds from the cash exercise of the first 50 million public warrants post-closing, up to a maximum of approximately $8.6 million. In total, Cantor's disclosed fees contingent on closing amount to as much as $33.3 million.

The proposed structure for the post-closing company is no better: the Sponsor has piled on one-sided advantages that benefit only CC Capital and not public investors. For example, the transaction employs a 10-to-1 dual-class voting structure in which the Sponsor's Class B shares will carry ten votes per share. Even with no Class A redemptions, the Sponsor's voting control will be approximately 65%. Public stockholders who currently hold 100% of the publicly traded equity will be severely diluted from a control perspective, consolidating CC Capital's control over the combined entity indefinitely. Consistent with this insider control, CC Capital has enriched itself by installing an affiliate to provide administrative services to the Company—which has no operations other than holding digital assets—under which it will be paid 1% of the post-transaction company's assets, or approximately $7 million in the first year alone.

Manipulation of the Shareholder Vote

Expecting that most public stockholders would not support such a lopsided insider deal, Cantor began to take extraordinary proactive measures at the end of 2025 to ensure that the proposed transaction would obtain sufficient votes for approval. On or about December 19, 2025, Cantor purchased approximately 7.8 million Class A shares—approximately 27% of the public float—for roughly $83 million. The purchase was for the disclosed purpose of voting in favor of the proposed merger. The Sponsor granted Cantor a waiver of Article 49.5 of the Company's articles of association, which ordinarily restricts any single shareholder or affiliated group from redeeming more than 15% of outstanding shares without Sponsor consent. By granting this waiver, the Sponsor enabled Cantor to acquire a massive voting bloc, vote the shares in favor of the transaction, but also simultaneously redeem them for cash from the trust account without the protections Article 49.5 was designed to provide to public stockholders. Combined with the Sponsor's own 20% voting interest through its Class B founder shares, the Sponsor and Cantor together control at least 47% of total voting power—a near-majority bloc with a direct financial interest in consummating the transaction irrespective of its merits for Class A holders.

Harm to Public Stockholders

The net result of this misconduct is that, from the perspective of Class A stockholders, the board and Sponsor have destroyed the fundamental business purpose of the SPAC and converted it into a private vehicle for a predetermined affiliated transaction. Rather than conduct the genuine, arm's-length search for a business combination target contemplated by the Company's governing documents and described in the IPO prospectus, the new Sponsor has commandeered the entity to consummate its pre-planned self-dealing that will make management tens of millions of dollars on a valueless transaction that will cause immediate losses for any public stockholders who do not redeem. The managers of the Sponsor and SPAC owe fiduciary duties to public stockholders, which they appear to have flagrantly breached in favor of their own financial interests and those of their affiliates. The firm's investigation is continuing. The statements above reflect our views at the time and are subject to change as additional information is received. Please contact us to further discuss or to provide information regarding this matter.

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Morris Kandinov LLP is a national law firm that specializes in recovering investment losses and protecting stockholder rights. We work on contingency (i.e., you do not pay our fees out-of-pocket). Our attorneys have made substantial recoveries for investors in jurisdictions across the country and we were recognized as a Top 25 Firm by ISS Securities Class Action Services.

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Source: Morris Kandinov LLP