Congrats on your work. However, (no snark intended!! ), you need an editor. I would suggest tightening up your articles. Very wordy and repetitive. It's like a 3 hour movie that should be 2 hours.
In your view, as the only party opposing the motion is a pro-se Brian Tuttle, what basis does the judge have for rejecting the settlement if there is no one left prosecuting the AMC shareholder case?
I know you've previously said that even when you feel you have the pulse of _what_ the Court is likely thinking that the timing can be tough, but so far VC Zurn has responded fairly quickly so please forgive two questions about timing. 1) You said you suspect the parties are back at the negotiating table working on a new settlement the VC could approve. What changes would be necessary to get approval, and would they need to include a longer timeframe than the scheduled hearing? 2) If the hearing goes ahead as scheduled, what might cause VC Zurn to take more than, say, a few days to a week to rule on the matter?
I'm not sure if you replied to the wrong comment here as these questions are just generally trying to understand what comes next, but I'll answer anyway so my potential bias is clear to anyone who reads my various other comments/questions. While I'm in the arb trade (long APE/short AMC) that profits from convergence of the two prices, it's actually net long the securities collectively due to a large fraction of the short leg being via AMC puts. I profit regardless of what price they converge at, but the higher the price at parity (most likely due to conversion being allowed, but also in the unlikely scenario the market realizes they're economically equal in ownership stake in the company & rights to any future dividends) the better it is for me. This is because as price increases above the put strike the short leg stops losing value at zero while the long leg continues to increase in value. I'm not expecting it and expect the opposite is far more likely, but nothing would please me more than if conversion were permitted and the price skyrocketed after the reverse split.
No. I was replying to you. Although I hope you’ve got a losing bet I’m being a bit of a purist. I don’t like crooks and I think Adam Aron is a crook. That’s not the purist part. I think that his APE work-around if allowed to stand sets a very dangerous precedent. #TeamHumanity
Chance has discussed elsewhere that commonality doesn't make a practice legal, but FWIW nothing AMC has done here is completely novel other than giving their depositary shares a whimsical name. If you search for "depositary share -adr -american"* there are multiple instances similar to this top result for a Bank of America issuance: https://www.sec.gov/Archives/edgar/data/70858/000119312519177628/d742908d424b5.htm
If you search within these filings for "instructions" you'll find nearly identical language as used by AMC. I'm glossing over a few ways in which these other depositary shares/underlying preferred shares differ, but the point is that Aron/AMC didn't invent either depositary shares to provide fractional ownership of preferreds or this mechanism of the depository voting all preferred shares in proportion to voting instructions received.
As far as I understand from what I've learned from Chance, it's entirely possible VC Zurn will decide similarly as in Boxed that precedence doesn't mean it isn't a violation of 242(b)(2), and these other companies will need to address it. As for my decision to maintain my trade position despite this uncertainty, the spread is wide enough that I believe the premium here is more than sufficient to justify the risk.
*The latter two exclusions are to filter out results for American Depositary Receipts, which are for foreign companies to access the US stock market
I think the key to all these shenanigans is back on Monday. The settlement announcement was dropped along with the date for the Q1 2023 earnings call date and I don't think that is a coincidence. The idea that this settlement appears out of the woodwork roughly about the time that the company got its first hard look at its like garbo numbers for last quarter and its standing cash reserves probably sent some chills up some spines over in Leawood.
And if you look at it from that perspective I really do think a lot of the gimmicks AMC is pulling makes sense. The lack of reasoning given to VC Zurn to removed the SQO directly because its a sort of Schrödinger's bankruptcy situation right now and they don't want to speak that idea into existence by putting it as part of the reasoning in a court document. Then the price of AMC crashes and ~if~ they get out of this lawsuit then their is no equity to milk to stay afloat. They will simply move from the Delaware Court of Chancery to Delaware Bankruptcy court. Not sure if that is a walk or a bus ride over there, but I'm sure it would be a pretty quite one.
Plaintiff's obviously want to get paid for all their work including the lawyer and they have no interest of playing Rose Bukater to AMCs Jack Dawson on this lawsuit. So they really don't care what it takes. They want to hit the eject button, damn the torpedo's, all hands on deck. I mean line 31 in the unopposed motion spells this out "although Plaintiffs believed their claims to be strong...the class faced a real risk of recovering nothing." I mean I have a video even looking back at AMC's Q4 2022 balance sheet and cash burn rate and said they have two maybe three more quarters before bankruptcy gets pretty real. Well...this is the second quarter since Q4. I'm going to say my math is starting to show itself.
Add in this is being paid in share instead of cash and I think the pieces all come together. AMC called Plaintiff's lawyer saying they hit an iceberg (yes I will continue to labor this Titanic analogy). Plaintiff's immediately met up with them and in the fever of just trying to get this through. Throw up a Hail Mary to see if VC Zurn will just let this slide without them having to say the b word. It didn't work. Now they are going to have to figure out what they want to do from here.
I mean sure. I'm not saying they are right for doing this I was just suggesting where in the conservatory the lead pipe might lay that Professor Plum used.
Let me fill you in on what’s really happening. I am strongly of the opinion that CEO Adam Aron was put in place to “take out” AMC . He has a history as a “company killer”. Retail would have bought real/non-synthetic APE shares at $10. This was not permitted. Why? APE wasn’t created to generate capital for AMC. If so why was it sold at $0.66 to Antara to buy the votes AMC management wanted to get their proposals in place which allows them to swap out their recalcitrant retail base for a more “malleable” base. Permitting APE voting rights (which shareholders never approved) sets a very dangerous precedent. From now on will the management of any publicly traded company have a court-approved blueprint for swapping out a shareholder base for one more to their liking if proxyvotes don’t go their way. AMC’s deliberately poor management is their problem and shouldn’t be considered by the court here. Maybe they should stop purchasing non-producing gold mines ( A payback deal to Mudrick.) Walmarts within a few miles of AMC headquarters still don’t stick Adam Aron’s much touted popcorn. He ran up that 5 billion in crushing debt before the pandemic and has made no effort to pay it down with the billions retail support of this company provided. I am an AMC shareholder. Are you?
It was sold at that price because over the course of a month the market dumped it down to that price. None of the common shareholders that bought it held it. Everyone saw it as the dilution tool it was. There doesn't need to be some grand conspiracy theory to understand that and if you really do think this is just some backdoor way to dispose of a groups shareholder base I don't think you have been paying attention to this trial or AMC's current cash problems and general shareholder approval from both classes anyway, nor the fact that this thing went to trial anyway. Having to blow money on lawyers, settle with plaintiffs, or possibly lose is a real threat and deterrent. I can't identify a single point in your post that I would consider based in reality.
By the way Chance and I understand that this is not where your motive lay your comments about the integrity of the Vice Chancellor provided comfort to the millions of AMC retail shareholders who were ambushed by APE and do not want this conversation and reverse split to happen. Anyone who things that this vote wasn’t rigged needs to understand that all shareholders residing outside of the U.S. and Canada are not able to vote in proxy votes (even Canadians face roadblocks) and look at the “novel” and different protocols put in place for APE votes vs AMC votes. This vote was more rigged than the 2020 U.S. Presidential election.
nice article. Does the notice period have to be over before the judge would approve the lifting of the status quo order and signing off on the proposed settlement? How likely is it that she would approve both on a contingent basis?
Well done and thanks Chance (I say yet again).
Seconded
Congrats on your work. However, (no snark intended!! ), you need an editor. I would suggest tightening up your articles. Very wordy and repetitive. It's like a 3 hour movie that should be 2 hours.
No.
You must have missed the explication for this intentional stylistic choice, here: https://open.substack.com/pub/thechancerydaily/p/amc-motion-to-compel-me-to-stop-writing. It also gives you your own set of choices. 😇
Chance what is the correct form of address when writing a letter to the Vice Chancellor?
Here’s a link to the instructions on how to write a letter to the Vice Chancellor. It should be addressed to Honorable Vice Chancellor Zurn:
It should be typed in 14-point Times New Roman, double-spaced, regular font. Not bold, not italic, not underlined, not anything weird.
http://chancery.ink/amcintp
Thank you.
In your view, as the only party opposing the motion is a pro-se Brian Tuttle, what basis does the judge have for rejecting the settlement if there is no one left prosecuting the AMC shareholder case?
I know you've previously said that even when you feel you have the pulse of _what_ the Court is likely thinking that the timing can be tough, but so far VC Zurn has responded fairly quickly so please forgive two questions about timing. 1) You said you suspect the parties are back at the negotiating table working on a new settlement the VC could approve. What changes would be necessary to get approval, and would they need to include a longer timeframe than the scheduled hearing? 2) If the hearing goes ahead as scheduled, what might cause VC Zurn to take more than, say, a few days to a week to rule on the matter?
Is this Adam Aron or are you shorting the stock?
I'm not sure if you replied to the wrong comment here as these questions are just generally trying to understand what comes next, but I'll answer anyway so my potential bias is clear to anyone who reads my various other comments/questions. While I'm in the arb trade (long APE/short AMC) that profits from convergence of the two prices, it's actually net long the securities collectively due to a large fraction of the short leg being via AMC puts. I profit regardless of what price they converge at, but the higher the price at parity (most likely due to conversion being allowed, but also in the unlikely scenario the market realizes they're economically equal in ownership stake in the company & rights to any future dividends) the better it is for me. This is because as price increases above the put strike the short leg stops losing value at zero while the long leg continues to increase in value. I'm not expecting it and expect the opposite is far more likely, but nothing would please me more than if conversion were permitted and the price skyrocketed after the reverse split.
No. I was replying to you. Although I hope you’ve got a losing bet I’m being a bit of a purist. I don’t like crooks and I think Adam Aron is a crook. That’s not the purist part. I think that his APE work-around if allowed to stand sets a very dangerous precedent. #TeamHumanity
Chance has discussed elsewhere that commonality doesn't make a practice legal, but FWIW nothing AMC has done here is completely novel other than giving their depositary shares a whimsical name. If you search for "depositary share -adr -american"* there are multiple instances similar to this top result for a Bank of America issuance: https://www.sec.gov/Archives/edgar/data/70858/000119312519177628/d742908d424b5.htm
If you search within these filings for "instructions" you'll find nearly identical language as used by AMC. I'm glossing over a few ways in which these other depositary shares/underlying preferred shares differ, but the point is that Aron/AMC didn't invent either depositary shares to provide fractional ownership of preferreds or this mechanism of the depository voting all preferred shares in proportion to voting instructions received.
As far as I understand from what I've learned from Chance, it's entirely possible VC Zurn will decide similarly as in Boxed that precedence doesn't mean it isn't a violation of 242(b)(2), and these other companies will need to address it. As for my decision to maintain my trade position despite this uncertainty, the spread is wide enough that I believe the premium here is more than sufficient to justify the risk.
*The latter two exclusions are to filter out results for American Depositary Receipts, which are for foreign companies to access the US stock market
I think the key to all these shenanigans is back on Monday. The settlement announcement was dropped along with the date for the Q1 2023 earnings call date and I don't think that is a coincidence. The idea that this settlement appears out of the woodwork roughly about the time that the company got its first hard look at its like garbo numbers for last quarter and its standing cash reserves probably sent some chills up some spines over in Leawood.
And if you look at it from that perspective I really do think a lot of the gimmicks AMC is pulling makes sense. The lack of reasoning given to VC Zurn to removed the SQO directly because its a sort of Schrödinger's bankruptcy situation right now and they don't want to speak that idea into existence by putting it as part of the reasoning in a court document. Then the price of AMC crashes and ~if~ they get out of this lawsuit then their is no equity to milk to stay afloat. They will simply move from the Delaware Court of Chancery to Delaware Bankruptcy court. Not sure if that is a walk or a bus ride over there, but I'm sure it would be a pretty quite one.
Plaintiff's obviously want to get paid for all their work including the lawyer and they have no interest of playing Rose Bukater to AMCs Jack Dawson on this lawsuit. So they really don't care what it takes. They want to hit the eject button, damn the torpedo's, all hands on deck. I mean line 31 in the unopposed motion spells this out "although Plaintiffs believed their claims to be strong...the class faced a real risk of recovering nothing." I mean I have a video even looking back at AMC's Q4 2022 balance sheet and cash burn rate and said they have two maybe three more quarters before bankruptcy gets pretty real. Well...this is the second quarter since Q4. I'm going to say my math is starting to show itself.
Add in this is being paid in share instead of cash and I think the pieces all come together. AMC called Plaintiff's lawyer saying they hit an iceberg (yes I will continue to labor this Titanic analogy). Plaintiff's immediately met up with them and in the fever of just trying to get this through. Throw up a Hail Mary to see if VC Zurn will just let this slide without them having to say the b word. It didn't work. Now they are going to have to figure out what they want to do from here.
Boo hoo. Tough luck and irrelevant.
I mean sure. I'm not saying they are right for doing this I was just suggesting where in the conservatory the lead pipe might lay that Professor Plum used.
Let me fill you in on what’s really happening. I am strongly of the opinion that CEO Adam Aron was put in place to “take out” AMC . He has a history as a “company killer”. Retail would have bought real/non-synthetic APE shares at $10. This was not permitted. Why? APE wasn’t created to generate capital for AMC. If so why was it sold at $0.66 to Antara to buy the votes AMC management wanted to get their proposals in place which allows them to swap out their recalcitrant retail base for a more “malleable” base. Permitting APE voting rights (which shareholders never approved) sets a very dangerous precedent. From now on will the management of any publicly traded company have a court-approved blueprint for swapping out a shareholder base for one more to their liking if proxyvotes don’t go their way. AMC’s deliberately poor management is their problem and shouldn’t be considered by the court here. Maybe they should stop purchasing non-producing gold mines ( A payback deal to Mudrick.) Walmarts within a few miles of AMC headquarters still don’t stick Adam Aron’s much touted popcorn. He ran up that 5 billion in crushing debt before the pandemic and has made no effort to pay it down with the billions retail support of this company provided. I am an AMC shareholder. Are you?
It was sold at that price because over the course of a month the market dumped it down to that price. None of the common shareholders that bought it held it. Everyone saw it as the dilution tool it was. There doesn't need to be some grand conspiracy theory to understand that and if you really do think this is just some backdoor way to dispose of a groups shareholder base I don't think you have been paying attention to this trial or AMC's current cash problems and general shareholder approval from both classes anyway, nor the fact that this thing went to trial anyway. Having to blow money on lawyers, settle with plaintiffs, or possibly lose is a real threat and deterrent. I can't identify a single point in your post that I would consider based in reality.
That won’t keep me up at night.
And yet here you are trying to jam your conspiracy theories into everyone's replies. Cool story bro.
By the way Chance and I understand that this is not where your motive lay your comments about the integrity of the Vice Chancellor provided comfort to the millions of AMC retail shareholders who were ambushed by APE and do not want this conversation and reverse split to happen. Anyone who things that this vote wasn’t rigged needs to understand that all shareholders residing outside of the U.S. and Canada are not able to vote in proxy votes (even Canadians face roadblocks) and look at the “novel” and different protocols put in place for APE votes vs AMC votes. This vote was more rigged than the 2020 U.S. Presidential election.
Chance you need an edit button for comments. I forgot to proofread.
I think there is an edit button for comments, in the ... ?
nice article. Does the notice period have to be over before the judge would approve the lifting of the status quo order and signing off on the proposed settlement? How likely is it that she would approve both on a contingent basis?