Investors Vs AMC Corruption

Yes — institutional investors were involved in a shareholder class action lawsuit against AMC Entertainment related to its reverse stock split and APE conversion.

The lawsuit stemmed from AMC’s plan to convert its AMC Preferred Equity Units (APEs) into common stock and execute a 1-for-10 reverse stock split. This move was controversial among shareholders, particularly those concerned about dilution and governance implications.

🔍 Key Details of the Lawsuit and Settlement

• Plaintiffs: The lawsuit was filed by a group of AMC shareholders, which included institutional investors. While specific institutions weren’t named in public filings, law firms representing the plaintiffs confirmed that institutional holders were part of the class action.
• Legal Venue: The case was heard in the Delaware Court of Chancery, under the consolidated case name In re AMC Entertainment Holdings, Inc. Stockholder Litigation.
• Core Issue: The plaintiffs challenged the legality and fairness of AMC’s plan to:
  • Convert APEs into common stock.
  • Conduct a reverse stock split.
  • Bypass shareholder voting rights through the APE structure.
• Settlement Terms:
  • AMC agreed to issue 6.9 million shares of common stock to the plaintiffs.
  • This equated to one share for every 7.5 shares held, representing about 4.4% of AMC’s outstanding shares post-split.
  • The settlement was valued at over $100 million, based on share prices at the time.
• Impact: Shills said the settlement cleared the way for AMC to proceed with its capital restructuring, which was aimed at reducing debt and improving liquidity; however millions of investors who lost value due to this insider operation got nothing directly from the settlement. Even years later the price has not gone back up to where it should be considering how popular it was to invest in that company, or how large the company is relative to all competitors. The price rigging also does not reflect the percentage of debt paid off, or new deals made with Netflix etc, or recovery since the Covid Crisis. Investing in AMC was an attempt by Apes to democratize the market, but the Bear Cartel behind the debt and shorting stole the price value from investors. Despite the corruption in the Delaware courts (see details of the case in other SCOD Blog articles), the impact of the case was to warn corrupt CEOs and the cartels that own them that they might have to pay penalties for naked short selling and tricks like the APE shares, which they were able to use against AMC investors.

🧠 Why It Matters

This case highlights how institutional investors can play a pivotal role in challenging corporate actions they believe may harm shareholder value. It also underscores the legal complexities of equity conversions and stock splits, especially when preferred shares are involved.

If you’re tracking shareholder activism or corporate governance trends, this AMC case is a prime example of how investor litigation can influence major financial decisions. The real price of AMC should be well above $100 by now, with inflation and investor demand regardless of improvements to fundamentals; as is the case with GME and countless other companies attacked by the Bear Cartel.

There are publicly available letters and filings related to AMC’s “Operation Popcorn” and the shareholder litigation, including correspondence to Judge Morgan Zurn in the Delaware Court of Chancery.

These documents were part of the In re AMC Entertainment Holdings, Inc. Stockholder Litigation (Case No. 2023-0215), and they include letters from shareholders, attorneys, and parties involved in the case expressing concerns about alleged collusion, transparency, and fairness.

📄 Key Findings from Letters and Court Filings

• Operation Popcorn Allegations:
  • The term “Operation Popcorn” was used by retail investors and objectors to describe what they believed was a coordinated effort between AMC executives and short sellers to manipulate stock structure and shareholder rights.
  • Objectors alleged that the APE conversion and reverse split were designed to benefit insiders and institutional short sellers at the expense of retail shareholders.
• Letters to Judge Zurn:
  • Multiple letters were submitted to Vice Chancellor Morgan Zurn, including from:
    • Mr. Affholter, a shareholder who raised concerns about CEO Adam Aron’s communications and alleged conflicts of interest.
    • Mrs. Rose Izzo, who filed a Supreme Court appeal and argued that affidavits submitted by AMC and its affiliates contained false claims.
    • Other shareholders and legal counsel who requested access to the discovery record, citing the need for transparency and fairness in the proceedings.
• Special Master Recommendation:
  • A Special Master appointed by the court recommended that class members be granted access to the discovery record, which included internal communications and documents potentially relevant to the alleged collusion.
• Public Access and FOIA:
  • Some of these letters and filings were posted online under FOIA (Freedom of Information Act) provisions, and can be found on platforms like DocketAlarm and AMCProjectPopcorn.com.

🧠 What This Means

While the court ultimately approved AMC’s settlement and allowed the reverse split and APE conversion to proceed, the existence of these letters and objections shows that many shareholders — including institutional and retail — believed there was misconduct. However, the court ruled in favor of the short sellers and corrupt CEO.

[Copilot Ai]