AMC Entertainment Shareholder Settlement Upheld by Delaware Supreme Court

AMC Entertainment (AMC) won final approval from the Delaware Supreme Court Wednesday for a settlement proposal and stock conversion plan that allowed the movie theater chain to sell more shares and pay down debt but was opposed by some investors.

The dispute began in December 2022 when the company proposed issuing a new series of preferred equity units to Antara Capital as part of a forward purchase agreement and debt financing, according to AMC's most recent annual report.

The deal was opposed by some of AMC's retail investors, who filed a pair of shareholder lawsuits in Delaware Chancery Court, the report said. Under a proposed settlement in April 2023, AMC agreed to issue more shares to its existing investors to keep their positions from being diluted and implement a reverse stock split, according to the report.

Another group of investors sought to block the agreement after the Chancery Court's approval in August last year and filed an appeal with the Delaware Supreme Court. Their appeal was heard by a three-judge panel in January, according to the AMC annual report, with Wednesday's court order affirming the August 2023 ruling without comment.

AMC shares recently were nearly 3% lower in midday trading Wednesday.