This Week in Chancery Court: AMC’s Stock Conversion Fight

AMC Entertainment Holdings Inc. will appear Tuesday in Delaware’s Court of Chancery, an updated schedule in a case where shareholders and a pension fund are challenging the movie theater operator’s efforts to convert its preferred equity units into common stock.

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

Monday: Tornetta v. Maffei, Del. Ch., No. 2019-0649, teleconference 4/24/23.

At issue: Chancellor Kathaleen St. J. McCormick ruled earlier this month that Sirius XM Holdings Inc. must face a class action trial challenging its $3.5 billion acquisition of Pandora Media Inc. Now the satellite radio giant and former Pandora board members are asking her to push back a five-day trial scheduled to start May 19, because the plaintiffs want to amend their complaint.

Noteworthy: The shareholder lawsuit was filed in 2019 by Richard Tornetta, a former heavy-metal drummer who’s also leading separate litigation over Elon Musk’s $55 billion pay package at Tesla Inc.

Court action: Teleconference.

Sirius-Pandora Buyout Case Headed for Trial in Overworked Court

Monday: In re Hycroft Mining Holding Corp., Del. Ch., No. 2023-0394, hearing 4/24/23.

At issue: The court still has to hear a few more petitions from companies seeking a court fix for stock issue during a blank-check merger. Vice Chancellor Lori Will already has granted dozens of similar petitions over the last couple months; a Feb. 21 opinion explains her rationale. The scores of such petitions that landed on Will’s docket have only exacerbated the court’s strenuous workload, other chancery judges have complained.

Court action: Back-to-back hearings on petitions from Hycroft Mining Holding Corp. and Vertiv Holdings Co.

Tuesday: In re AMC Ent. Holdings Inc. S’holder Litig., Del. Ch., No. 2023-0215, teleconference 4/25/23.

At issue: A hearing previously scheduled for Thursday was canceled, with a new one set for Tuesday. Vice Chancellor Morgan Zurn said in a letter that the teleconference would concern “settlement scheduling and logistics,” but it appears unlikely that she’ll issue a final ruling approving or rejecting a proposed settlement. The deal announced in early April would let AMC move forward with its controversial conversion plan after two months of fast-tracked litigation.

APE units are fractional units of preferred shares issued in a special dividend to retail investors that previously bailed out the company. Although the units are theoretically equivalent to class A stock, they have traded at a steep discount due to uncertainty surrounding them. The shareholders say the vote approving the deal wasn’t conducted fairly and sidelines retail investors.

Court action: Teleconference.

AMC Hearing in APE Conversion Dispute Moved up to April 25 (2)

— With assistance from Mike Leonard