This Week in Chancery Court: AMC Stock Conversion Settlement

The AMC Entertainment Holdings Inc. stock conversion plan, completed last year amid bitter opposition from its retail investors, is once again up for discussion at the Delaware Chancery Court.

Here are the highlights from the court’s calendar this week:

Tuesday: TA Dispatch LLC v. Svindland, Del. Ch., No. 2022-1043, bench ruling 10/1/2024.

At issue: Vice Chancellor Nathan A. Cook will make a bench ruling on a motion by former Celadon Group Inc. executives to dismiss a lawsuit from Alabama trucking and transport management company TA Dispatch LLC, which bought Celadon’s assets shortly before the transport and logistics company went bankrupt. The former executives argued that TA Dispatch is trying to re-cast claims that already failed in an Indiana state court. TA Dispatch said it “has alleged facts sufficient to state claims for negligent misrepresentation and statutory suppression under Alabama law, tortious interference, and common law negligent misrepresentation.”

Court action: Cook will deliver his bench ruling via teleconference.

Bankrupt Celadon, TA Dispatch Reach $3.25 Million Settlement

Wednesday: Simons v. AMC Ent. Holdings Inc., Del. Ch., No. 2023-0835, oral arguments 10/2/24.

At issue: The Delaware Supreme Court upheld a settlement allowing AMC to proceed with the stock conversion opposed by its meme stock base. Preferred shareholder Michael Simons says the deal shortchanged APE holders like him, while AMC says Simons’s amended complaint seeking damages should be dismissed because he “sat back and let the Conversion and sSettlement Payment happen” without trying to stop their completion. Simons argues the timing of his lawsuit was reasonable and the case should proceed because AMC deprived preferred stockholders of their anti-dilution rights. Separately, one of the 3,000 retail investors who objected to the settlement has asked the US Supreme Court to overturn the series of rulings that allowed the movie theater chain to recapitalize.

Court action: Oral arguments on the motion to dismiss will be heard before Vice Chancellor Morgan T. Zurn in Wilmington, Del.

AMC Investor Challenges Court-Approved APE Stock Conversion Plan

Friday: Entrepology LLC/C Lawrence LLC v. Palladium Equity Partners LLC, Del. Ch., No. 2022-0063, teleconference 10/4/2024.

At issue: Zurn is expected to deliver a ruling approving a settlement Palladium Equity Partners LLC reached with the founders of the CircusTrix, Rockin’ Jump, and Sky Zone trampoline parks. The proposed accord would resolve litigation alleging the private equity firm duped minority members of the parks’ umbrella parent company into a self-dealing refinancing during the early days of the pandemic. The founders’ attorneys seek a $3.5 million fee award.

Court action: Zurn will deliver her bench ruling via teleconference.

Palladium Sued by Trampoline Park Founders Over Refinancing Deal