“Judge Rejects AMC Settlement on Stock Conversion; Shares Soar”
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Boom! Big news, folks! AMC Entertainment Holdings’ stock conversion plan just got a major shake-up! Hold your popcorn, ’cause here’s the scoop: a judge slammed the brakes on their proposed settlement. And guess what? Shares are going wild!
So, what’s the deal? Delaware Vice Chancellor Morgan Zurn put her foot down, sayin’, “Uh-uh, no can do.” She ain’t givin’ the green light to a plan that hands out a cool $129 million worth of shares to AMC’s common stock holders. Why? ‘Cause it leaves out those preferred shareholders who were left hangin’ without representation. Ouch!
After that verdict dropped, AMC’s common shares shot up a whopping 69% to $7.44, while the preferred shares took a dive, down 20% at $1.43. That’s a rollercoaster ride, ain’t it?
The lawsuit that sparked this whole drama hit AMC back in February, accusing ’em of fixin’ a shareholder vote so they could convert preferred stock to common stock and flood the market with brand spankin’ new shares.
Those investors who hauled AMC to court claim the company was sneakin’ around, tryin’ to get away with diluting the common stock holders’ stake against their wishes. Not cool, AMC, not cool at all!
But hold on, without that proposed settlement, what’s the outcome? Well, common stockholders get to keep 34.28%, while the preferred ones will hold 65.72% of the company. Not too shabby, huh? But with the settlement, it’d be 37.15% for the common stock folks and 62.85% for the preferred crew.
You might think this deal would make everyone happy, right? Wrong! Zurn came in with the cold hard truth: common stockholders might get some compensation, but that doesn’t mean they get to squash potential claims from the preferred shareholders. Fair is fair, folks!
And oh boy, this settlement got a whole lotta attention! Zurn called it “unprecedented” with over 2,800 shareholders raisin’ their voices in protest. That’s a whole lotta noise for sure!
Some of those folks weren’t buyin’ AMC’s bleak financial forecast, callin’ it “fear tactics” and askin’ to bail out of the settlement party so they could sue AMC on their own terms. Brave souls!
But here’s the twist: those objectors didn’t see the hitch Zurn pointed out about the preferred shareholder claims. It’s like missin’ a clue in a detective movie, ain’t it?
AMC’s in a pickle, though. They’re burnin’ cash like there’s no tomorrow and wave the bankruptcy flag if they can’t raise some serious dough. But they can’t carry out their plan to raise funds until this whole legal mess is sorted out. Talk about bein’ stuck between a rock and a hard place!
So now, it’s back to the drawing board for the parties involved. They might wanna tweak that settlement and take another shot at gettin’ the judge’s nod.
What a rollercoaster ride this has been! Stay tuned, ’cause this AMC showdown ain’t over yet! The case goes by the name of In re: AMC Entertainment Holdings Inc. Stockholder Litigation, No. 2023-0215, in the Delaware Court of Chancery.
There you have it, folks! AMC’s stock saga continuin’ with a plot twist you wouldn’t wanna miss! Keep your eyes peeled for more updates and let’s see where this wild ride takes us next!