AMC Entertainment (NYSE:AMC) is suing nearly 20 insurance companies in a new lawsuit.
The company is claiming they’re breaching its liability policies by refusing to cover the cost of a major investor lawsuit the theater operator plans to settle for more than $100 million, per Bloomberg.
The new lawsuit followed hours after lawyers leading the shareholder case asked for $20 million in legal fees as part of the proposed settlement.
“These claims fall squarely within defendants’ coverage obligations,” meaning they’re “obligated to, among other things, pay 100% of the defense and settlement costs,” AMC said in its 35-page complaint against 17 liability insurers.
AMC’s new lawsuit stems from the dispute in Delaware’s Chancery Court with a pension fund and two other shareholders who challenged the company’s plan to convert the APE preferred units into common stock.
“The settlement—worth more than $100 million at current trading prices, according to recent court filings—would resolve claims that the APE conversion reflects a complex corporate engineering scheme aimed at unfairly sidelining ordinary shareholders.
The deal would give each owner of common stock an additional share for every 7.5 they hold,” said Bloomberg.
Vice Chancellor Morgan T. Zurn, who has received a tidal wave of stockholder letters opposing the agreement, recently scheduled a June 29 hearing to evaluate its fairness.
She has said she’s committed to issuing a full written opinion approving or rejecting the settlement, a ruling that would likely come by the end of September.
Latest AMC Lawsuit News and Updates
Recently, AMC CEO Adam Aron said he was seeking to file a new lawsuit against Robinhood after the trading platform had falsely reported AMC Entertainment had filed for bankruptcy.
“This company has filed for bankruptcy. This typically happens when companies are close to running out of money or have trouble repaying their outstanding debts,” Robinhood reported under ticker symbol AMC on its platform.
“What the DUCK !!!!! I am getting multiple reports that Robinhood briefly posted today that AMC filed for bankruptcy.
How can companies like Robinhood do this?
So ludicrous, so wrong, so irresponsible.
On Friday, we report Q1 earnings, and will announce our sizable cash position,” said AMC CEO Adam Aron in a statement on social media.
He later wrote:
“I am so Ducking angry about this. They are either incompetent or evil, and either is absolutely inexcusable. Obviously, there is no truth to their postings. Outrageous behavior. I have already asked our lawyers if we can sue the Dastards. #IncompetentEvil”
Robinhood responded on the AMC bankruptcy notice after investors and the CEO raised concerns about the lucrative reporting.
The following statement was released by the broker:
“On 5/1/23 at 1:45 pm ET, Robinhood experienced a technical issue leading to an incorrect banner being applied to AMC. The banner was removed at 1:48 pm ET. We apologize for this error.”
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