AMC: Excusez moi, s'il vous plait, what the ---?
As I lay me down to ... omg I am never going to get any sleep again, am I?
So, I finally finish minding my own business and going on about writing my pièce de résistance of a Substack post that I’ve been trying like hell to finish for the past few days in advance of the Special Master’s Report and Recommendation coming out tomorrow in the AMC case, and I think maybe I should get some sleep because tomorrow is going to be crazy, but you know, I should probably take one last sweep around the bases and make sure that nothing’s been published to any of the — OH MY GOD WHAT IS THIS BUT A VICE CHANCELLOR LASTERIAN-LIKE FOX/SNAP HEARING PREP-TYPE ALMOST MADE BILL LAFFERTY DRIVE OFF THE ROAD-WORTHY LETTER FROM VICE CHANCELLOR ZURN … OMG I AM NEVER GOING TO GET ANY SLEEP EVER AGAIN, AM I?
Holy sheep, y’all. Straight hot off the BLBG website presses, here you go. This is a wild ride. If we weren’t 100% sure that Vice Chancellor Zurn had the bandwidth to dive headfirst in all the way underwater before, we can be sure that Zurn is Zurning just like I always told you that Zurn would Zurn. Zurn is Zurn and I’m sorry if I ever questioned whether Zurn might be exhausted from the absolutely relentless mad insanity of this case, and whether she might pull back a bit from to just lay off the gas a little and maybe be a little less Zurny than usual, because no, that was solely my own exhaustion and poltroonery talking. Because look at this beatific piece of work.
And hey, if you already read the long-ass exploration of all the details of my own thinking about the settlement that I literally just hit publish on, well, you’re ahead of the game, because we already covered the basics of Rule 23 class certification that she lays out first thing here. However, remember how I made that joke about how there were hopefully some “noncontroversial” elements of the Rule 23 analysis? Yeah, hahahahahahahaha … sooooo funny.
Because, yeah, Not. So. Fast. We can’t take anything for granted here.
Y’all, the next two weeks are going to be bonkers, and maybe a good bit of our lives beyond that.
All I have to say about this right now is 1. Jordan Affholter should get an honorary something from somewhere because he managed to find something that lawyers who are most certainly being paid thousands of dollars an hour all managed to absolutely whiff on, at various stages of this game, and 2. if Allegheny doesn’t have another brokerage statement showing that they own actual AMC common stock in another brokerage account somewhere, this case is about to get absolutely APE wild, because it’s not at all clear that Vice Chancellor Zurn sees Franchi as a viable representative lead plaintiff under the operative facts here.
The crazy thing is that the §242(b)(2) claim, as I elaborated on here, is — in my professional opinion after lots of reflection — a bit of un chien, as they say, particularly in light of the the opt-out in the Certificate of Incorporation and the latest and greatest gloss on that old saw Dickey Clay, so it’s somewhat fascinating that it’s essentially now threatening to bring down this entire edifice by backdating the effective date of the class period to a time period ex ante of Franchi’s alleged initial purchase.
Just when you think this thing can’t go any more sideways … off we go. Maybe, for the moment, actually … to bed?
Much love,
Chance
P.S. If you’re not up to speed before the Special Master’s Report and Recommendations come out, you’re going to fall too far behind, so make sure you’re caught up, here:
AMC: Are we there yet?
As Vice Chancellor Glasscock succinctly described it in In re Riverbed Technologies, Inc. Stockholders Litigation, “much of what I do involves problems of, in a general sense, agency: insuring that those acting for the benefit of others perform with fidelity, rather than doing what comes naturally to men and women—pursuing their own interests, sometimes in ways that conflict with the interests of their principals. In this task, I am generally aided by advocates in an adversarial system, each representing the interest of his client. . . . The area of class litigation involving the actions of fiduciaries stands apart from this general rule . . . . Such cases are particularly fraught with questions of agency: among others, the basic questions regarding the behavior of the fiduciaries that are the subject of the litigation; questions of meta-agency involving the adequacy of the actions of the class representative—the plaintiff—on behalf of the class; and what might be termed meta-meta-agency questions involving the motivations of counsel for the class representative in prosecuting the litigation.”
P.P.S. In the light of the morning, and with the help of a prodding call by an inquisitive and persistent reader who questioned the fact that the cited documents in the Allegheny production had a document betwixt and between them, namely ACR-AMC-00000333—I think I have figured out what happened here. I do not think that Allegheny has sold any of their shares of AMC. I do not think this entire edifice is going to come crashing down around us. I do not think our lives are going to necessarily be upended for the next six months (although if the Vice Chancellor doesn’t think the scope of the release jives with Delaware law, we might be hanging out together a little while longer than some folks would prefer, see, e.g., as detailed above).
I think what happened is that when objector Rose Izzo’s counsel was reviewing documents, they cited to the pages of Allegheny’s holdings in their brief that reflected the APE holdings, not the AMC holdings, which then led to a cascading set of failures, including Mr. Affholter reasonably assuming that the universe of documents that were made public (which were only the limited set of documents that were cited by Ms. Izzo’s counsel) reflected the universe of documents available to support Allegheny’s stockholdership in AMC common. But the missing ACR-AMC-00000333 suggests that perhaps this is not the case, and I believe my suspicions will be confirmed in short order. This would make much more sense than the alternative. I believe the “new lead plaintiff, who ‘dis” crisis has been averted, at least for now. Certain factual and legal questions that remain about Mr. Franchi’s status, and we’ll obviously see responses on the docket to all of these items in advance of the Friday deadline, but the latter is much less consequential to the overall outcome than would have been the former, in light of the somewhat more precarious position of the latter.
P.P.P.S. I updated this post with the above P.P.S. in the mid-afternoon around the same time as I tweeted this out. Late this evening, Allegheny’s lawyers filed a confirmation that my hypothesis was in fact, correct. 😇 One thing we can check off the list of “crazy things that could go sideways here.” There are still a few items from the Franchi list of questions to parse conceptually, however. More to come on that. In the meantime, the Special Master also released her Report and Recommendation this evening as well, recommending denying the objections and — insofar as the objections are concerned — approving the settlement over them. Of course, as detailed in the prior post, objections are only one aspect to consider in approval of the settlement (depending, in part, on how many of the main substantive Rule 23, notice, or fairness issues the objectors themselves raise, in an inception-ouroboros kind of vibe). So, to be sure, there are still miles to go before we sleep.
Maybe just a little, to rest my head.
Much love,
Chance
Something tells me Allegheny didn't commit perjury for the lolz, but none the less something to keep us entertained while waiting for the R&R.
Does Zurn write all these responses and orders by herself? Or does she provide an outline and have clerks to help write and pull in citations?! I feel bummed on her behalf that she has to produce so much high quality content in such a short amount of time. I mean, maybe she’s just super humanly efficient, but I don’t know how she gets in enough sleep and self care with the volume of text she outputs.