AMC: I told you so[me useful things]

Wherein I do my level best to refrain from stating the obvious

There are probably at least a dozen aphorisms, proverbs, and scripture passages that would caution me against acting out some of the behavior I might otherwise desire to act out this evening. You know, “pride cometh before a fall” and all that. John Cena’s “You Can’t See Me” celebratory hand-gesture is getting a lot of play around the internet this week, and I don’t want to co-opt a discussion that’s about much more important topics like racism and disparate treatment of athletes in women’s sports, but it’s possible that I might have to give it a try or at least something like it. I mean, I don’t want to be gauche, but y’all, I’ve been out here on the internet for the last several days fighting off the hordes of quite (definitely not quiet) vociferous mansplainers telling me how abjectly wrong I was, and it was pretty fcking exhausting, ngl.

Credit where credit is due, change is possible.

So, your wish is granted!

Let’s dive in with some thoughts on the parties’ next steps. I don’t even feel like, or have time for a big lead in tonight. I’m exhausted, my adrenal glands are fully shot, and I’m about to crash land so let’s just do this thing.

Next steps: whatever they agreed to in their term sheet, that’s the real answer. Tragically, like so many things in litigation, we have no blessed idea what those things are. I think one thing is for sure, there’s probably a bit of chaos on both sides of the v. tonight. From my read of this opinion — Oh! Did I forget to mention? The Court put out an opinion!

The Court Put Out an Opinion And It Was Pretty Much Right Along The Lines of What I Thought It Might Be

That’s the headline. Also, I was the only human on the planet who thought that. Ok, that’s unfair. I think Alison Frankel came around, but she’s brilliant, so obviously. But with all you other folks, it was like playing fcking “Who wants to be a millionaire?” I can’t tell you how many times I got asked in the past several days, “Is that your final answer?” Are you sure you don’t want to change your answer? But this smart fcking dude says you’re wrong. So-and-so things you’re full of hooey. Boy genius over here says you don’t know diddly squat. “Are you sure you don’t want to change your answer?” And I kept having to say, “no, no, no, no.” THIS IS MY FINAL ANSWER.

And every time I would have more than five minutes in a row to talk through the case, on our team calls or on my daily walks around the neighborhood, by the end of any extended stretch of talking through the issues, I would be so worked up about how abjectly obvious the outcome was, I would be so angry at myself for even cabining my position at all. But of course, it’s the internet, and it’s AMC, and I’m a responsible human, and truly, I have no blessed idea what the Court is ever going to do, so yes, I’m always going to speak cautiously, but g-d damn it if this thing didn’t just grind all my gears without any oil whatsoever.

And so, the Court put out a ruling. And the Court denied the motion. And that was a thing that So Many Bros™️ told me was never going to happen because Vice Chancellor Slights had called Chambers or whatever other magical incantation had been cast over the Court of Chancery, and it’s all so much fckery, and I knew in my heart it didn’t matter a whit. And, in hindsight, I was right. And, hindsight is always 20/20, it turned out, I was just also about 20/10 forward-looking in this instance as well.

Look, none of that truly matters. I’m gloating, it’s funny, it’s nice to feel like you understand the people that you love and admire from afar, so it’s a good feeling, I’m not going to pretend like it’s not. The Court is made up of humans, and I think they are all very cool people, they are all quirky in their own ways, and they each please me to no end for very different reasons, and it’s a pleasure and an honor to be able to study their output the way that I do all day and every day. And it’s a lot of fcking work, day in and day out. So, it’s nice when it feels like it was worthwhile, and it’s nice to be right when everyone has been trying to tell you that you were wrong. Maybe it’s petty, maybe it’s spiteful—I’d probably be a malefic goddess if I were suddenly granted preternatural powers. Luckily, I just happened to study my arse off and obsessively fret over absolutely every detail that goes in and out of this court with six of my closest friends and colleagues who have been doing this for the past decade, and you know, as I talked about last year with the Twitter matter: voilà, overnight success!

I’m reminded of that little tweet thread because it was after a similar time when I had accurately predicted 5 out of 6 of the Chancellor’s rulings (which was honestly not hard for anyone who knew anything about Delaware law, so I don’t pretend like it was rocket science), but being in all the nuance, and in the right place at the right time, with the right set of skills, and the right voice to deliver the message, that took the confluence of a lot of work, luck, people, happenstance, ass-busting, late nights, sacrifice, &tc.

I feel the same gratitude now for Kyle and all of our team at The Chancery Daily because although I write this Substack solo, none of it is a cognitive journey that I walk alone, and that is the part that is the most important to me. (I feel like I’m giving an Oscar acceptance speech, just let me have this moment, thank you to the Academy, thank you to everyone who puts up with my annoying and incessant text messages about fine points of Delaware law at all hours of all days of the week, you know who you are, I love you, you are my heros, ok, I see that they are playing the music to get me off-stage now...thank you to my subscribers, I couldn’t do this without you, I love y’all…)

Ok, I think I’m over myself. Thank you for letting me have my moment.

By the way, here’s the Chancery Salvo we sent out to our practitioners’ list earlier tonight about the ruling. If you’re not signed up for that list, you can get signed up here. It’s maybe 2-4 items per month, only major rulings or BFD happenings around the Court. It’s free. Why would you not? I don’t know. People are weird.

I think that I will answer a few more quick questions (including the one that I interrupted myself answering above) and then make a plan for hitting the remaining content in future posts, because this gal is beat. But also unbeaten. (I swear I’m done gloating now. As of … right … now.)

Ok, so, back to timing and things. From my read of the opinion—I mean, welp, the motion is denied. The motion was to lift the status quo order. Have we learned nothing about the way that Vice Chancellor Zurn operates? That means that the previously-existing schedule will be in place unless and until you put the proper paperwork in front of Her Honor to establish a new or different schedule, such as a proper one for a settlement hearing, if that is the direction in which you desire to take the case. That has not yet happened, unless it has happened on the shadow docket of File&Serve while it has been offline in the off hours. But barring some revelation on the docket in the morning, and assuming nothing has been filed, I assume the Court assumes the hearing is still on April 27th until the parties do something to put the case on a different trajectory. At this point, they have not done that.  

As a practical matter, outside the concerns of the Court, depending on the terms of the term sheet, one would imagine that the parties go back to litigating, unless they go back to the drawing board on settlement. The term sheet will have had (should have had — unless they truly didn't anticipate reality) a contingency for denial of this motion, so they will fall back to that contingency plan. The usual terms would mean usually mean that denial would send them back to litigation, but this whole posture was unusual from the jump, making the settlement contingent upon the lifting of the SQO, so there’s really no telling what “clever” settlement structure they ginned up. I guarantee you there’s a bro out there who’s schooling me in his mind right now about what a “usual” term sheet involves. Cool story, bro.  

Interestingly, Adam Aron's deposition was slated to be taken tomorrow today, April 6th. One would imagine that the term sheet anticipated a push-back of the discovery schedule in the event of a denial of the motion to lift the status quo order. However, note a couple of relevant things. First, if the parties were so head-in-the-clouds about not anticipating this denial, because man, there were a lot of bros who told me this could not happen, let me tell you what, then I don’t know, it’s possible that they really didn't think through a proper set of contingencies for this timing. Again, that’s truly a “their problem” kind of thing.

Needless to say, whatever's going on right now, it's chaotic af on both sides. But you’d imagine that they likely had some agreed upon adjustments to the schedule, but it's not clear to me how well they would have thought through things given how poorly it feels they were thinking about the plan overall. Of course, I have no insight or visibility into the term sheet or the settlement talks beyond what has been revealed through the explications in their briefing, so that’s very few deets.

However, one important note: remember when we talked about this schedule?

Well, now we are talking about edits to this schedule based on their “new [plan], who dis?” situation. Ok, but there’s one piece of important information that you are probably missing unless you are a practicing lawyer. And that is this—and it’s actually kind of weird. Well, to be fair there were two very weird things about this spreadsheet little calendar thing. One I cropped out to save your eyes. The other is just weird like a fckup, or weird on purpose, I’m not sure which.

So, being that I am absolutely some sort of OCD perfectionist, there are very few things that I hate more than a screenshot with a page break in its midst, like the one below, which is already causing me to break out in hives, but unfortunately, I have no choice but to show it to you and leave it there for demonstrative purposes:

Ughhhhhh, god, it’s so ugly. But it’s also ugly because someone, bless their heart, it was probably the middle of the night, and they deserve grace, does not know how to use a header row. Remember, any attorneys that are reading this, that in a good managerial structure, responsibility flows uphill and whoever signed this brief is the one who should take responsibility for not knowing how to use header rows in Microsoft Word. Anyhoo, you can see that—instead of a header row—we get two rows (a), which I had to crop out along with the page break in the image I previously circulated, because oh. my. god. I can’t even look at that monstrosity.

But! There was an actual reason I was showing you this, and it wasn’t just to share in perhaps a common neurosis as a mechanism by which to bond as friends. It’s because there’s always a bit in scheduling orders (or at least normally) wherein the the Court will say yeah, okay, you can have this Scheduling Order, and you can fck with it up to a point (the Court doesn’t actually curse) but after this line here, you don’t get to mess with it, these dates have to stick. Now, many times, it’s those last two dates on the spreadsheet thingy that cannot be fcked with. However—and I don’t necessarily think this is related to the way in which it’s substantively weird—but the last two items on the spreadsheet here are actually a repetition of the first item and the last item, so that’s kind of odd. But even setting that aside, the substantively bizarro part is that—and I suppose this is going to vary widely and again, it’s not a thing I keep an overtly keen eye on because I really have no reason to do so but—it’s very weird which dates are fixed here that require leave of Court to change, and that they were fixed originally by the parties (and not in an override by the Court). It’s just … like a very weird choice.

Normally, say, for trial, the dates in the original submission that are fixed and require leave of Court to change are the ones where the Court is involved, like the pre-trial conference and the trial dates. Obviously. You can’t fck with the Court’s schedule. And then you submit the schedule for approval and sometimes the Court will be like, okay, yeah, cute, of course you can’t mess with those dates, thanks, Captain Obvious, but also, let’s lock in the briefing dates, too, because I want to make sure you get me the briefing with a certain amount of time in advance of trial so I can actually read it, or whatnot (or if I’m Vice Chancellor Laster, to write my own little dissertation letter on said briefing and potentially cause—with or without vicarious liability—a car accident in so doing), and they will grant the scheduling order “with modifications” to say, basically, okay, cool, but also, you can’t fck with these dates either, without leave of Court. So, in my experience, and again, I’ve got no reason to have done a comprehensive study of this particular piece of administrivia, but it’s usually the dates that physically involve the Court, or if the Court wants to blue pencil the thing, then sometimes the locked-in dates include the whole of the briefing schedule.

Here? It’s just … weird.

Here? Here’s the paragraph:

Huh? Just the reply brief? That’s … just … weird, is it not? I mean, when I see this 1(h) and 1(i) language above, it is frequently referring to like a pre-trial conference and trial date, as I mentioned, so it’s not uncommon to see a dual item carve-out, but—perhaps entirely apropos of nothing related—you’ll recall that the other order that Zurn entered concerning the “are you going to proceed on the statutory claim?” had some definitely-suspiciously-cut-and-pasted looking thing going on in it because there was a reference to “any such motion” but literally no prior language about “any such motion” at all.

(As I noted previously elsewhere, they did in fact notify the Court that on March 10th that they had intended to proceed on the statutory claim as well as the fiduciary duty claim.)

Anyhoo, what is this all to say?

This is all to say that I suppose they have wiggle room up until April 25th? Maybe?

But could they get cute and try to file briefs on the 23rd, 24th, and 25th or something dopey like that? I really don’t think the Court would appreciate that, but there’s currently not anything technically stopping them from shenaniganery, so I don’t know. 😐 I mean, who would want one day to respond to a brief, that would be ridiculous, but … many things about this case have been bonkers, so if there is one thing about which I will not prognosticate, it’s Elon Musk. Well, ok, two things. Elon Musk and the parties’ actions in litigation.

Point being, for now, they have a little flexibility in the schedule to get their shit together. They have the hearing on April 27th, as things stand. Some armchair quarterbacks assume that they do not want to proceed to litigate the case at this point. I do not know that I agree in a certain sense, in that I do not think it would be a great reputational choice for firms with very good reputations to choose to abandon ship at this stage in this game in front of this judge. I mean, I’m sure they don’t want to be litigating this case any more than I want to be writing about it in the middle of the night, but how does that old saw go, again? 🎶

Me thinks the parties are hard at work, working on a settlement. I also do not think that Vice Chancellor Zurn would be pleased at all to hear that AMC is trying to pull some dumb shenanigans relating to somehow suddenly being unable to complete a settlement just because they couldn’t get their absurd contingency the way they wanted it. I don’t even have the energy to do the fake sarcastic impersonation of what their ridiculous excuse string would sound like for why they can’t just continually issue new shares, despite having incessantly offered, begged, and pleaded to issue new shares up until the very moment they were told they couldn’t do it contingent upon getting it Burger King-style.™️

Y’all, I have to go to sleep. But speaking of Vice Chancellor Laster writing car crashingly thoughtful letters, I haven’t even gotten to digest his Dell letter yet, except I know that it made me want to pull out this piece of scholarship and revisit it.

But, to answer your question above, to the parties, their shit together to get! Put your other questions in the comments below. I’m going to leave these comments open for non-paying subs, don’t make me regret it in the morning. 😇

Coming up for paid subs soon: full debrief on Rule 23

Coming up for all subs soon: review of stockholder objections

Much love, Chance