(Reuters) Allegheny County Employees’ Retirement System filed a lawsuit against AMC Entertainment (NYSE:AMC) claiming that the company and several of its directors violated state law to “eviscerate” the voting power of common stockholders, who had not supported issuing new shares.
The Allegheny County Employees’ Retirement System is pursuing a class-action complaint in Delaware’s Court of Chancery against AMC and its board members, including CEO Adam Aron, seeking a temporary restraining order against a planned March 14 conversion vote.
The pension fund asked the Delaware Chancery Court to declare the preferred shares invalid and ban the holders of the preferred shares from voting.
“This Action challenges a course of complex and disloyal corporate engineering by the Defendants — described by AMC’s Chief Executive Officer and Chairman, Defendant Adam M. Aron as an exercise in ‘3-D chess’ — devised to achieve a simple aim: eviscerating the voting power of AMC’s Class A stockholders in order to force through approval of a proposed dilutive share count increase that those stockholders repeatedly had rebuffed and were not willing to support at the corporate ballot box,” the complaint says.
Plaintiffs are seeking an order restraining the defendants from submitting the proposals for a vote until the plaintiffs can take expedited discovery and present a motion for a preliminary injunction – and they anticipate it can complete the necessary discovery within 30 days of a temporary restraining order.
The latest AMC news has shareholders wondering why the institution is taking legal action to slow down the conversion of APE shares to AMC common stock.
It’s been five months since the inception of APE and the pension fund never took legal action in the months prior.
What are your thoughts on what’s happening with AMC?
AMC Entertainment shares rose by +16.41% on Tuesday, its equity (NYSE:APE) fell by -7.92%.
The company explored two main proposals:
- To convert shares of its equity APE back into common shares of AMC stock.
- Undergo a 1-for-10 reverse stock split.
More than 82% of shareholders said they were voting ‘yes’ on the proposals that would dilute shares and play in the company’s favor fundamentally.
CEO Adam Aron has not addressed the lawsuit against him and the company publicly to shareholders yet.
Leave your thoughts on what’s happening with AMC Entertainment in the comment section below.
You can read more breaking AMC stock news here.
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Frank is one of the few keeping it real straight. I’d expect a big attack on Frank.
Everyone is entitled to vote the way they feel best. What many need to keep in mind is that voting NO the first time is what landed us here. We denied the company from raising funds and thus APE was created. We can sit here and talk about all the ways that the SEC, DOJ, FINRA, SIPC and DTCC have refused to acknowledge the corruption that is currently happening but we also have to acknowledge that this MOASS we all envision as well will not happen if the company goes bankrupt.
One may say fundamentals don’t matter but the fundamentals are exactly why it was targeted as a short squeeze plays. People want to say debt doesn’t matter because all companies have debt but look at it from a consumer point of view for a moment. Yes majority of us have debt but if you have more debt than you do earnings does it make life more comfortable? Or would you rather be debt free and be able to fully enjoy life? It’s the exact same way for AMC. Whether most want to admit it or not, the only way to invalidate the short sellers thesis is for the company to completely eliminate the debt and start to have the revenue exceed the debt it carries.
If the company goes bankrupt due to all the manipulation, the only people who win are the short sellers who bet against the company to begin with. If that is what voting NO means to you, then do so. Yes the dilution of a 10-1 is extreme but if that will allow the company to clear the debt load so it can begin on the path to a profitable future where we can all benefit and eventually reap the rewards of being long suffering shareholders then I am all for it. With that said, like Kenan Grace says”You are the CEO of your own portfolio” so vote accordingly.
The shareholders voted against the dilution of AMC shares. The company instead issued APE shares. Now the company AMC wants to merge APE back into AMC effectively diluting the shares of AMC common stock. Shareholders didn’t want dilution in the first place. That’s what the pension fund is trying to argue. The company went over the share holders wishes.
Yes because saying NO the first time worked soooooo well when the company desperately needed to raise money. Voting NO instead just for voting NO sake is what has landed us here, along with all the manipulation happening with the stock that the SEC, DOJ, FINRA and DTCC are refusing to acknowledge because they are probably in too deep as well. Had all of these agencies done their job properly in the first place we wouldn’t be here much less have APE as an alternative. They are wasting time with this lawsuit. If they were really concerned they could have filed months ago. Filing now makes no sense at all.
APE only came out in Aug 2022. It takes time to see the effects of that. Plus the orchestrated Antara Capital Company deal just happened 2 months ago. And when Proposals for voting came out, in which it was released they would be voting yes, that is probably what finally drove the Complaint to be written up and filed. The Complaint was about 45 pages, which takes time to compose also.
It’s desperation at it best all this time they said nothing. You can bet your last 2$, that KG an his lousy friends are in it. They have much too lose since they’re naked shorting an spoofing an dark pool AMC to the ground. Why didn’t this institution just sell before 82% shareholders wanna vote yes. Look at all those ftds an threshold’s list of AMC you think they would complain about that but, a vote to improve I smell a rat an his name is KG
Very irresponsible Frank. The poll of 1500 is way too small. I will vote NO! A yes vote will dilute our shares where it will never recover and, we lose the power of shareholders owning majority of the company. In addition, the shareholders that paid $55 per share will have to wait until the shares go up to $550 each to break even. Only Adam Aron will benefit. Write that in your blog. I’m not surprised he’s getting sued.
It’s a tough situation, no doubt.
82% vote yes? A poll of 1,500 doesnt nearly show the true feelings of hundreds of thousands a’s mds of shareholders. I believe a sample size of 1500 is way too small to parade its results around as near-fact.
Time will tell if the community sentiment was indeed that strong or not.
A bit irresponsible to state 82+ are voting yes. That’s not a fact. The fact is, you don’t know. No one does, the voting is still on-going. Also kind of veering off from discussing the main subject of this article. Did you add this to sway people?
Btw, I have not voted yet.
This was based on a poll where more than 1,500 market participants voted. This article was published objectively with current and relevant news and facts surrounding AMC Entertainment right now.
I hope it stands, but do not think it will as he leader Rotten Pop Corn has plenty of attorneys and do not think they missed this topic.
I do think the timing is strange. APE has been out since August. Just curious why the lawsuit didn’t come out any time prior to the proposals if they were so against the issuance of the equity.
I voted NO along with most other shareholders. It’s time AA and the corrupt board of directors are held accountable.
So far, most people have said they’ve voted yes or plan to vote yes. Time will tell how accurate that is.
I will vote NO as well.
I think is weird that they waited this long for this, so it makes me think they’re trying to stop the MOAS.
I agree Norma – the timing is definitely suspicious.
What are your thoughts on what’s happening with the AMC and Adam Aron lawsuit? Leave your thoughts below.
I believe the Board of Directors and the CEO are corrupt and have taken advantage of the Retail investors who saved AMC from going Bankrupt – Chip
I agree with Chip. Adam Aron has the nerve to dilute our shares after retail investors saved his company from bankruptcy.