A newly filed lawsuit claims a Wall Street felon barred for life from running public companies secretly controlled a Nasdaq-listed blank-check firm by hiding behind an 87-year-old Florida real estate mogul, while the company itself collapsed into delisting, mass shareholder redemptions, and multimillion-dollar judgments.
The suit, filed by BN Holdings Trust against Alan H. Ginsburg and unidentified defendants in Manhattan federal court seeking at least $14 million, alleges that Daniel L. Gordon pulled the strings at Sagaliam Acquisition Corp. even after agreeing to a 2003 lifetime SEC ban from serving as a public-company officer or director, according to the New York Post. BN Holdings Trust, described as Texas trustees who bought a controlling interest in Sagaliam's sponsor in 2023, claims it was deceived about Gordon's role and about millions of dollars in undisclosed liabilities, per the same report. Ginsburg has denied any wrongdoing, and his attorneys filed a motion to dismiss the lawsuit on October 5, arguing that the SEC filings were truthful and that Ginsburg had no role in the sale of the sponsor interest, the Post reports.
A SPAC Built on a Disputed Chain of Control
Sagaliam Acquisition Corp. was a special purpose acquisition company that went public in December 2021, with its prospectus identifying Ginsburg as the sponsor's controlling managing member. That characterization traces back to a Form S-1/A filed with the Securities and Exchange Commission, which stated plainly that Sagaliam's sponsor was controlled by its managing member, Alan H. Ginsburg. Yet Gordon was named in Sagaliam's first SEC filing back in May 2021, according to the Post, and a later Schedule 13D filed with the SEC identified GLD Sponsor Member LLC, GLD Partners LP and Daniel L. Gordon as reporting persons tied to Sagaliam's Class A and Class B common stock.
According to the lawsuit, as described by the Post, attorneys at Ellenoff Grossman & Schole warned Sagaliam's Barry Kostiner in July 2021 that Gordon's criminal past and lifetime SEC ban threatened the company's Nasdaq listing — then quit just four days later. Gordon allegedly introduced Ginsburg to replacement lawyers by email that same month and, in August 2021, proposed changing the beneficial-owner disclosure to list Ginsburg, per the suit as reported by the Post. Emails filed with the complaint allegedly show Gordon continuing to wield influence behind the scenes even after the disclosure change, the Post reports, and the suit seeks a civil contempt finding against Ginsburg tied to Gordon's 2003 federal judgment.
Investors Pushed Back as a Merger Fell Apart
Tension over control reportedly boiled over in December 2021, when two investors offered $250,000 conditioned on changes to share allocation and company-fund control, according to the Post's account of the suit. Gordon allegedly rejected that offer, saying he and Ginsburg would cover the funding shortfall themselves — also subject to share-allocation changes — and warned investors he would remember their demands concerning legacy, the Post reports. Those tensions escalated after Storyfile withdrew from a planned merger with Sagaliam, prompting investors to demand shares as a safety net; Gordon allegedly advised Kostiner on how and when to act once investors sought that protection, per the same report.
Sagaliam's financial position deteriorated sharply around that same period. Public shareholders redeemed roughly 92% of their shares and withdrew $107.6 million from the trust account in December 2022, leaving Sagaliam with less than $10 million remaining, the Post reports — a steep drop that a trade-publication account citing the SPAC's roughly $116 million December 2021 IPO also notes. The company ultimately failed to secure the outside financing it needed, according to the suit as described by the Post.
The Saudi Applebee's Deal That Never Closed
Even as its finances crumbled, Sagaliam pursued an ambitious 2022 deal that would have valued an Arabian entertainment company — which operated 17 restaurants in Saudi Arabia, including Applebee's locations — at $379 million, according to the Post. GLD Partners had bought the entertainment company from Sedco Holding in February 2022 and stood to receive $180 million in stock plus up to 35 million bonus shares from the arrangement, per the suit as reported by the Post; Gordon signed the deal as a director of the intended public parent, and GLD Partners could reportedly name directors and choose the board chairman under certain conditions. Marshall & Stevens provided the fairness opinion underpinning the valuation, the Post notes. The Saudi Applebee's acquisition collapsed in February 2023, and GLD Partners never received the proposed stock payout, according to the report.
Sagaliam's problems compounded from there. Two investment funds sued the company in November 2023 over its contemplated merger with drugmaker Enzolytics Inc., and soon won a preliminary injunction blocking a vote to extend the merger deadline, according to Bloomberg Law. A federal court later ruled that the funds had adequately stated a claim that the merger deadline had passed and that the company must wind down, the outlet reported. Separately, Mayer Brown's Hong Kong partnership won default judgments against Sagaliam and its sponsor totaling nearly $2.3 million in 2024, according to the Post.
Delisting Followed Disclosure Failures
Nasdaq ultimately suspended Sagaliam's common shares at the open of business on March 8, 2024, after the company withdrew its appeal of a delisting determination, according to a Nasdaq announcement. Nasdaq said the company had failed to seek shareholder approval for its business combination and for the related issuance of more than 47 million shares — specifically 47,872,000 shares issued on September 15, 2023, in connection with Sagaliam's acquisition of Virogentics Inc. and Biogenysis Inc. Nasdaq also cited the company's failure to disclose the closing of that business combination and the share issuance, concluding that continued listing was inadvisable given the accumulation of rule violations, disclosure failures, and untimely periodic filings. A related SEC filing stated that the company failed to disclose the closing of the transaction and issuance of shares either to Nasdaq or to the public beyond an earlier Form 8-K.
Gordon's history with securities regulators extends well beyond Sagaliam. He was sentenced to 42 months in prison on October 14, 2005, for embezzling $43 million from Merrill Lynch, and was fined $100,000 and ordered to forfeit the stolen money the same day, according to the Post. Court records reviewed separately show a Gordon was also permanently enjoined from violating federal securities laws and ordered to pay approximately $7 million over an oil-and-gas scheme, and that a Gordon and related companies were found to have defrauded at least 18 investors out of roughly $1 million in an unregistered real estate securities offering run from July 2016 through January 2018 — raising $947,515 in that offering without SEC registration and diverting $145,000 toward personal expenses including hotels, restaurants, and casinos, according to court records.
A Separate Judgment Tied to the Sponsor Sale
The same sponsor stake at the center of the BN Holdings Trust suit has already produced one courtroom defeat. Gordon's camp agreed in 2023 to sell its interest in Sagaliam's sponsor to BN Holdings Trust for about $1 million, according to the Post, but Kelli Austin and Kathleen Miller — named in connection with BN Holdings Trust — claimed the sponsor business carried more than $8 million in undisclosed liabilities. A New York court subsequently granted GLD Sponsor Member LLC summary judgment against BN Holdings Trust and Kelli D. Austin on a promissory note and guarantee, awarding a joint-and-several judgment of $422,500 with contractual default interest running at 15% annually from June 29, 2023, according to court records published by Justia. The court found that both the borrower and guarantor had expressly consented to New York jurisdiction under the note and guarantee. A Justia docket entry separately lists the BN Holdings Trust v. Ginsburg et al. case in the Southern District of New York, though that docket snippet notes it was last retrieved in September 2026 and may not reflect the most current filings.
Outside legal observers quoted by the Post offered sharp assessments of the allegations. Attorney Robert Heim said undisclosed control by a company or person would represent a serious violation, while Anthony Sabino said Gordon could not legally hold responsible office at a publicly held company given his history. Jacob Frenkel said the facts as alleged warranted a federal investigation, according to the same report. A representative for Kirkland & Ellis declined to comment, the Post reports, and Ginsburg did not respond to the Post's request for comment. Mayer Brown took over Sagaliam's SEC dealings in 2021, according to the Post's account, though no response from that firm was noted in the report.
