AMC: Now We Can AMC Some of WTF is Going On

The Settlement Saga of the Century

The AMC settlement was noticed to stockholders at the beginning of May after a bit of a bumpy start, and the weeks that have followed have been some of the craziest I can remember. And I’m the person who just survived what I thought were the craziest months on record last year at the hot molten core of the Twitter v. Musk fiasco. But this AMC thing is another level of woah altogether. (Extra points if you get the Extraordinary Attorney Woo reference.)

This morning, Vice Chancellor Zurn posted a fairly innocuous-sounding minute order on the docket with the following text:

On May 9, 2023, a stockholder filed a Rule 5.1 Notice of Challenge, challenging the redactions in the operative complaint. D.I. 259 at 4. No party filed a motion seeking continued confidential treatment within the time Rule 5.1 allows. The unredacted operative complaint shall be unsealed.

The relevant portion of the document (D.I. 259 at 4) reads as follows:

This paragraph was somewhat buried in a much longer and diversely-topic’ed letter, to which defendant did not respond. (Even less surprisingly, neither did plaintiff.) Whether or not it was an intentional move to simply not respond and allow the myriad redactions to the complaint to come out from under seal, it’s hard to know, but nonetheless, that’s what happened. One theory says perhaps Weil allowed this somewhat-buried 5.1 challenge to go unopposed to bolster an argument that would-be objectors do not lack any requisite information necessary for filing objections, such that they should not be granted access to discovery — a topic that has been the subject of various recent motions and letters to the Court. Whether that argument will fly will have to be the topic of another post, which may just be preempted by a ruling from the Court or the Special Master in the meanwhile. We shall see.

For now, here is the unredacted complaint for all it is worth.

I have to admit — it’s one of my favorite things in the world when a judge does something fairly noncontroversial but the results are semi-scandalous. Not that there’s anything particularly scandalous in these unsealed portions of the document, although I’m not entirely sure the internet isn’t going to find these arrows just a little facially sus. (I think that — like all nuanced things — they can mostly be explained by reference to complex provisions of the DGCL, decades of case law and corporate law practice, and complexities of AMC’s pre-existing preferred issuance, but that elbow curve on the bottom there sure has potentially regrettable optics.)

Honestly, this is the problem with this case, and the reason why I haven’t been able to finish a single post about it for the past two weeks. Everything is so nuanced, so complicated, and everything is so fraught and — it feels like walking into a field of landmines, just to even try to approach saying anything about it, nevermind trying to do so responsibly. But look, I know that I want to, and I know that I am going to, and I’m actually quite close to having an entire diagesis completed about the notice provisions, the stipulation, and the process for objections, because it’s beyond time to get that information out to people, as now is the time to decide whether or not one wishes to file an objection. I spend the better part of every day reading, thinking and talking about this case, so publishing about it is the next logical step. I really don’t have any interest in being used as fodder for various conspiracy theories, or being a tool for various people’s agendas, especially for people who go around the internet just being loud and vitriolic and angry. I understand the frustration and the anger, and I want to help by educating people. I really do. I want to provide information on cases that are interesting in the Court of Chancery. That’s what I do. I want to be wonky, and dive into the nitty gritty, and pick at the minutiae, and wonder at how the complicacies of things can evoke awe without it devolving into some 100x reductive point that’s used to make an incredibly acerbic post on Twitter. But I can’t control those things, and I don’t want to let a fear of how my work can be drawn and quartered silence me. I just wish I could make you all promise to be well-behaved. A girl can dream, can’t she? ::sigh::

Anyhoo, I understand a lot of people have been waiting on their postcards, but for people reading this, I want you to know that for the purpose of actually filing an objection, there’s no reason to wait for the postcard. The postcard directs you to websites, which to be honest are quite difficult to navigate in order to find what you are looking for. I thought I could save you a few steps to send you to the proper paperwork, because I personally took the last hour or so trying to dig around in each of the top-level domain sites to which the postcard points, trying to find where I would go, if I were looking for the notice information. And then, just as has literally happened with every other g-dforsaken thing in this case, I almost gave up on this post and called it a night because I went to link the following website and say: let me make it easier for you and just send you straight to the documents, which you can find here: https://www.stockholderlitigationinfo.com — why they didn’t just put that website on the postcard is beyond my comprehension. ¯\_(ツ)_/¯

But, then …

I clicked on that website, which I had literally typed out from what my eyes saw on the AMC website, after navigating around for thirty minutes trying to find where the documents lived, and it just … redirects … to a broken page. So, I figured I fcked something up, right? Obviously, I must have mistyped it. Let’s retrace my steps from the beginning.

Here’s a copy of the postcard, which — for the record — I don’t see was ever actually submitted to, or explicitly approved by the Court, per se. I suppose that’s not a fatal error or oversight, but it’s … well, perhaps not something I would have chosen to opt out of (pun intended) if I were the company in this case, wanting to get this settlement approved as expeditiously as possible. And maybe it’s an oversight on my part that I just don’t see it on the docket, because it’s not impossible that amongst the hundreds of filings that I have waded through I somehow missed it, but … I do not see it in the various back and forth that happened leading up to the final approval of the stipulation.

So, I read the postcard. And the first website it takes me to is: investor.amctheatres.com/newsroom.default.aspx, which — okay, if I’m being very literal and I type that into a search bar, this is what I get:

Which is — interesting, for several reasons. First, I know the problem. (PLEASE NOTE — I thought I knew the problem, but I was wrong — as I have subsequently updated in this later post — I fat-fingered the data entry here, so this next sentence is technically not relevant to what the postcard says but rather only to my mistyped data entry — the subsequent paragraphs are accurate, but you will want to finish reading this post, and the read the correction and update here, which I will also link at the end of this post, so you don’t skip the remaining information here that is still relevant.) The problem is that they have some internal redirection going on that isn’t working if you don’t add the www prefix (which they failed to include on the postcard), but second, the actual “website” for the documents is — in fact — listed on that page, even though it’s really not clear that it’s there because the first big words in your face are “Page not found,” which is facially a big discouraging to the average website visitor.

But, oddly, if you look under “Contact Information,” which on this page — since it’s so truncated without any other information on it — is actually sort of right in front of your eyeballs, you will see that link that I copied above https://www.stockholderlitigationinfo.com, which happens not to be a valid web URL address, but does happen to be a valid link on the AMC website, it’s just that it’s not actually pointing to that human-readable URL, it’s in fact pointing to https://investor.amctheatres.com/financial-performance/Shareholder-Meeting-Information/, which is actually the page that has the relevant information on it!

The alternative path to get to the proper information is thus to know to add “www” to the web-address, and then get properly routed to https://www.investor.amctheatres.com/newsroom.default.aspx, which you will note by your browser window details actually redirects you to https://investor.amctheatres.com/corporate-overview/default.aspx (hence the routing problem in the first place), but then you still have to somehow navigate your way further down the page to this weird “Contact Information” section and figure out that the thing you are looking for is this “Stockholder Litigation Info” section that links to a website that really isn’t the website that it says it is, but is actually the proper website that you are looking for.

Are you confused yet? This is literally how everything about this case goes. The moment I put my fine-tooth comb on it, it’s just nits everywhere, and I want to run and hide in a corner in the fetal position. Because it’s all nuance, and it’s endless fodder for people to create vast conspiracies and wild complaints, and I truly don’t think any of it’s nefarious, I’m sure some IT admin just fcked up a link and didn’t redirect a TLD properly, but the amount of consternation that something like this can potentially cause is so likely to be astronomical with millions of eyeballs on it, and the ability of anyone to grapple with the level of nuance required not to make some reductionist and reductive take about all of this … it’s just a lot, and it’s hard to report on it responsibly and without absolutely losing my mind. Case in point — this was supposed to be a simple little post about the unsealed complaint, and an oh-by-the-way-you-don’t-need-to-wait-on-a-postcard, but exactly nothing in this case is simple.

Let me try to make one thing simple for you. Let me give you the documents that you need to review in order to determine whether or not you want to object to the settlement. You do not need to wait for the postcard. Getting the postcard does not reflect your status as a beneficial owner or not. There are lots of reasons why you might not have received a postcard yet, including that perhaps your broker sucks, isn’t timely responding to the request for your address information, and holding in street name comes with a lot of risks that you might want to reconsider taking, especially if it continually bites you in the ass. Sometimes with great convenience comes great reduction in beneficial powers. One lesson that there could be to learn from all of this is that some of these brokers do not really gaf about you and your ability to timely receive notice of settlements or votes, and that could really impinge upon your rights as a stockholder. Anyway, more on that for another day. Complex things take time to explain, and I don’t have unlimited temporal or energetic resources, as much as I wish that it were that I did.

For now, here are the relevant documents, about which I promise to finish up my explanatory post by this weekend.

Notice of Pendency of Stockholder Class Action and Proposed Settlement

Letter to Stockholders from the Court (revised)

In-Person Appearance Form (Must be Received by May 31, 2023)

Plaintiffs’ Opening Brief in Support of the Settlement

Defendant’s Opening Brief in Support of the Settlement

Stipulation and Agreement of Compromise, Settlement and Release

Please, READ THE NOTICE if you plan to file an objection, and in particular, READ THE RULES therein about how to file your objection. And then read the Letter to Stockholders from the Court. And then read them both again. And then make a bulletpoint list for yourselves to make sure you have followed all the rules.

Let me just say this clearly, which I plan to reiterate in triplicate in my post explaining all the nuances of the objections process, but since I assume that if loads of you are filing “objections” onto the docket, in contravention of explicit instructions not to do so, there’s a good chance that you aren’t following other orders therein, I want you to know that YOUR OBJECTIONS WILL NOT BE HEARD IF YOU DON’T FCKING FOLLOW INSTRUCTIONS FOR REAL FOR REAL. Also, it seems like some of you aren’t going to be reading my post before you file your objections, and you only get to file your first objection (that’s in the rules, hope you read them carefully), so don’t fck this up.

This is not Kindergarten. You have to color WAY INSIDE THE LINES. Sometimes I forget that I am actually attempting to communicate with other grown ass adults in this case, the way that I have to hedge everything that I say because people in this case are so vitriolic and the way this community gets so toxic, but at the same time, y’all need some tough love. I was reading through some recent transcripts from Vice Chancellor Zurn, and I want to be clear that she will hold objectors to the same standards to which she holds all parties: high ones. YOU HAVE TO FOLLOW THE RULES. WHY ARE SO MANY OF YOU NOT FOLLOWING THE RULES AND FILING THINGS ON THE DOCKET? I mean, it’s your choice to throw your objections into the abyss of meaninglessness, but why are you wasting your precious life and time doing things that are utterly useless?

There are a lot of rules in the notice about the form of objections, including the following:

19. Any objections or statements in support must: (i) identify the case name and civil action number, “In re AMC Entertainment Holdings, Inc. Stockholder Litigation, Consolidated C.A. No. 2023-0215-MTZ”; (ii) state the name, address, and telephone number of the Supporter or Objector and, if represented by counsel, the name, address, and telephone number of the Supporter’s or Objector’s counsel; (iii) be signed (either by hand or electronically) by the Supporter or Objector; (iv) contain a specific, written statement of the objection(s) and the specific reason(s) for the objection(s), including any legal and evidentiary support the Supporter or Objector wishes to bring to the Court’s attention; and (v) include documentation sufficient to prove that the Supporter or Objector is a member of the Settlement Class. All supporting papers should be submitted with the original letter of support or objection, and no witnesses other than Objectors will be permitted at the Settlement Hearing. Documentation establishing that a Supporter or Objector is a member of the Settlement Class must consist of copies of an official brokerage account statement, a screen shot of an official brokerage account, or an authorized statement from the Supporter’s or Objector’s broker containing the transactional andholding information found in an account statement. ... Any Objector who has properly objected to the proposed Settlement and intends to speak at the Settlement Hearing should review the letter the Court intends to publish to AMC stockholders with specific instructions regarding the Settlement Hearing and return the form referenced in that letter to the Register in Chancery.

20. Any Person who fails to comply with the procedures outlined above in Paragraph 19 shall be deemed to have waived the right to object (including any right of appeal), and shall be forever barred from raising any objection in the Action or any other action or proceeding or otherwise contesting the Settlement or the application for the Fee and Expense Award in the Action, including any Incentive Awards to Plaintiffs, or any other proceeding, and will otherwise be bound by the Order and Final Judgment to be entered and the Releases to be given. Settlement Class Members who do not object need not appear at the Settlement Hearing or take any other action to indicate their approval.

Do you see the part about “waived the right to object … and forever barred from raising any objection” if you don’t follow the rules? That’s not a joke. It’s not kidding. It’s not not applicable if you don’t think it’s fair. It’s not optional.

Read the Letter to Stockholders from the Court.

Listen to what it says. I understand that some of you don’t trust lawyers or think that there is reason to suspect that there are lawyers who would put their entire careers on the line to avoid forwarding along your objection to the Court for its review, but honestly, that’s just not a credible concern. That would be an absolutely insane choice for an attorney to make, even if they were bonkers-level crooked, and I can promise you that — in my professional estimation — we are not dealing with anything like that here. I don’t expect you to just trust people because I said so, but I do expect you to try to trust logic and rational thinking, and it doesn’t make rational sense that any attorney, even an incredibly craven one, would risk their entire livelihood just to keep your theory of the case from getting in front of the judge, when the Vice Chancellor has by now heard just about every imaginable (and frankly, unimaginable) angle to this case. Please … I can’t promise you that your objections have legal merit, but I can promise you that if they don’t follow procedural process, they are going the way of the circular file.

If you want to have any chance of being heard … YOU HAVE TO FOLLOW THE RULES. To the letter. I don’t know how to say it any clearer than that, but this weekend, I’ll spend another twenty thousand words trying, I’m sure.

I’ve decided to put this post in front of the paywall for public access purposes, but this weekend’s post will go on the other side of the moat. If you can afford to buy stock like $AMC, you can afford to support the kind of work that I do, if you want to think critically about these issues. If you don’t want to, that’s one hundred percent your choice. That’s the beauty of capitalism. Either way, I wish you all the best in all things.

Much love, Chance

P.S. Here’s the subsequent update about my little fat-fingering and some updates on moar details about all things: