The lawsuit in Delaware’s Chancery Court seeks an order compelling the company to hold its first general shareholder meeting and board election in about 13 months.
Two board members appointed as replacements in January are overdue to face an initial investor vote, according to the complaint filed says Bloomberg Law.
The new AMC lawsuit was filed by Kevin Barnes, who’s allegedly a record holder of 111 Class A shares and the same number of APEs.
However, the SEC states that the Proponent does not meet the shareholder requirements to submit a proposal for an annual or special meeting.
“Rule 12a-8(b)(1) provides, in part, that to be eligible to submit a proposal for an annual or special meeting, a stockholder proponent must satisfy one of the Ownership Requirements by continuously having held either; at least (A) $2,000 in market value of the Company’s securities entitled to vote on the proposal for at least three years; (B) $15,000 in market value of the Company’s securities entitled to vote on the proposal for at least two years; or (C) $25,000 in market value of the Company’s shares entitled to vote on the proposal for at least one year.
Rule 14a-8(f) provides that a company may exclude a stockholder proposal if the proponent fails to provide evidence of eligibility under Rule 14a-8, including the Ownership Requirements of Rule 14a-8(b).
The DRS Statement provided by the Proponent lists 11 shares of Common Stock (at a value of $69.96) and 111 APEs (at a value of $210.90) as of October 17, 2022, thereby failing to provide proof of any of the requisite Ownership Requirements.“
Other Recent AMC Entertainment News
The SEC has now violated the 13-day Threshold Securities List rule for AMC Entertainment which states that a broker-dealer must immediately close out all fail-to-deliver positions by purchasing shares in the open market.
As of Tuesday, AMC has now been on the Threshold list for 17 consecutive days and pricing has not reflected indication of strong purchasing in the past week.
“Sometimes there are fails to deliver, and a fail to deliver is when you don’t have the ability to prove that you borrowed the stock legally before you actually shorted it”, said Yahoo’s Senior Markets and Data Reporter Jared Blikre.
He says a company joining the NYSE Threshold Securities List is a clear indication of manipulation in the market, primarily through ‘naked short selling’, which Wes Christian says is a worldwide problem.
AMC Entertainment FTDs surged big in the end of June according to the latest report by Stocksera.
By June 30th, the number of fails-to-deliver that day surpassed more than 12.9 million, equivalent to more than $57 million.
In April, AMC hit all-time highs when FTDs soared between 17 million and 18 million, equaling $85.4 million (non-cumulative).
FTDs, or Failure-to-deliver occurs when one party in a trading contract (whether it’s shares, futures, or options) fails to deliver on their obligations.
These failures derive due to buyers not having enough money to take delivery and pay for the transaction at settlement.
In the case of sellers, it means not having the goods to meet that transaction.
Failure-to-delivers can occur in options trading or when selling short naked, per Investopedia.
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