(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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Heck, I contributed to the sales by eating 8 myself.’ LMAO!