AMC: Y'all Don't Even Know The Half Of It
Lots Has Already Happened Since Last Yearsterday
All I can say is, if the decision in the AMC Entertainment, Inc. case was at all surprising to you, you must not be a subscriber to this Substack. It’s like that meme: if you have a surprised look on your face while reading that opinion, I’ll just look at you and say: “tell me you don’t follow Chance or read The Chancery Daily x Substack without telling me you don’t follow Chance or read The Chancery Daily x Substack” because I don’t know if I could have said or written more words about the scope of that release being problematic due to the inclusion of the APE claims without just boring you-all to absolute tears about it.
Not to brag (maybe a little), I even tracked down the first night that I discovered it, because I remember the moment clearly, when I was up late, digging into the release on a line-by-line, word-by-word basis, with the finest-toothed comb I’ve got in the vanity kit. It was about two or three o’clock in the morning, and there it was: the bright, screaming red flag. I went on Andrew’s Yet Another Value Blog podcast the next day, still exhausted from being up all night and talked about it publicly first time — that was two months ago, on May 24th. I started really honing into how central of a problem I thought it was over the next few days and weeks, tweeting about it, talking through it on YouTube, and putting it together here on Substack in the magnum opus in advance of the hearing, and continuing to zero in on it, the more attention I put on it. If you read the section in this post entitled “What The Fuck Now” you’ll basically see that there was really no other outcome than the one that just happened, although I did my level best to try to talk myself into any other possible option, for everyone’s mental health. I was incredibly unconvincing in doing so, and it was patently obvious reading it what was going to happen. I even analogized it to how sure I was feeling in advance of the Status Quo Order ruling, and we all know how I right I was about that one. (Is it gauche to gloat? Fck it, I think I’ve worked hard enough to enjoy the moment.)
Anyway, that’s all just to say, if you were surprised yesterday — either by the timing of the opinion or by its substance, you needn’t have been. And I’ll also say that a lot of you seem to be not only surprised by the outcome, but also appear to be dramatically misunderstanding the necessary implications of this ruling. But, ya know, that’s a recurring theme here on the inter webs. Maybe it’s just a fact of online life that I have to live with. Someday, maybe I’ll learn even to deal with it without taking it personally. Maybe.
There is a lot to debrief about the Opinion itself, but right now, I want to get some information out there about what is actually happening in the real world, and not just in my head, because something is happening that is, in fact, more important than anything I might have to say about the Opinion (ikr, shocking, for real though), and it preempts much of what I might speculate about “what is likely to happen in the upcoming days or weeks” since, well, ish is already going down.
But just briefly before the internet gets the cart forty-seven football fields in front of the horse, let’s just be clear that this opinion was not ruling on the final approval or rejection of the settlement as a whole or really even on its substantive merits. This Opinion was more like saying: “Hey, y’all! I know you’re in a super big hurry to get this thing done, and I’ve sat down to do the work, but there is this big, flashing red flag that is actually like a bright LED red flag, and it’s so bright that I really cannot concentrate on all the other predicate steps of the approval process, nor am I going to bother even writing out all my thoughts on the substance of the merits with this thing flashing in my face, because why would I even bother doing all that work if y’all are super committed to this release as it is written, because — as you might have heard — this release encompassing APE claims for AMC holders is a bridge too far and there ain’t no way it’s gonna fly. So, without yet walking through all the rest of the analysis, let me just say that 1. there’s no chance in Hades I’m gonna approve the release as it is, and 2. while we’re here, I overrule all the exceptions to the objections to the Special Master’s Report and Recommendations, and thanks so much to the Special Master, xoxo, xthxbai, pls send that faking complaint I’ve asked for like twenty times, much appreciate.”
So don’t trip, because although this is sort of an analogue to a Ghost Penciling™️ scenario, it is not that, because in a Ghost Penciling scenario, like ones we discussed such as UniSuper, Ltd., et al. v. News Corp., et al.,
C.A. No. 1699-CC, memo. op. (Del. Ch. May 31, 2006), where the Court had already addressed all of the other points relevant to settlement approval and said something more like, “Hey, y’all! Let me walk through the settlement approval steps! We’re good on #1 for all these reasons, we’re good on #2 and most of #3, but just so you know, there’s this one bit of #4 that I don’t like, and if you change it, I can then just sign right off on the final judgment and with that sign off, the approval will be a done deal.”
The biggest misconception I see floating around the internet right now is there was a final disposition on the settlement itself, such as a permanent injunction against the reverse split and conversion, for instance, or a decision rejecting the merits of the settlement consideration, for another. There was not. There was no ruling on anything like that. There was only the ruling that I described above, as articulated in the full opinion, here. To be fair, lots of news organizations who either don’t understand enough or don’t care enough to try to help avoid misunderstandings are doing their fair share of contributing to the problem. ::sigh::
Anyway, in the last twenty-four hours there has already been about twenty-four million human-hours’ worth of speculation about what’s going to happen from here. Would the parties actually get off their collective butts and do stuff, or were we going to have to wait another few weeks to see something from them, like last time? Was the Vice Chancellor going to have to ping them again? Well, wait no longer, because we already have an answer. The documents, they have been filed.
The parties have asked the Vice Chancellor to stay her order for them to file a consolidated complaint, pending what is basically a request to “take a look at this release language, see if you’re cool with it, and also — are you good if we don’t re-notice the class, ‘cause remember what a nightmare that was and no one really wants to do that again, amirite?” type of thing.
They attached an addendum to the settlement agreement and a revised proposed Order and Final Judgment and a redline of the same, which non-ironically still lists Munoz as a plaintiff, because well, it would just be too much to ask for these things to not be messy, I guess.