AMC and APE Dispute
In April 2023, a Delaware court ruled against a settlement between AMC Entertainment Holdings Inc. and its largest shareholder, APE Capital Management LLC. The ruling widened the dispute between the two companies, which had been ongoing for several months.
Background of the Dispute
The dispute between AMC and APE began in October 2022, when APE filed a lawsuit against AMC alleging that the company had breached its fiduciary duty to shareholders by issuing stock at a discounted price. APE argued that the discounted stock was issued to a select group of investors, including APE, and that the company had not disclosed the terms of the stock issuance to other shareholders.
In response, AMC filed a countersuit against APE, alleging that APE had engaged in a “short squeeze” of AMC’s stock. AMC argued that APE had purchased large amounts of AMC stock in order to drive up the price, and then sold the stock at a profit.
The Settlement
In March 2023, AMC and APE reached a settlement agreement. Under the terms of the agreement, APE agreed to drop its lawsuit against AMC and to not purchase any more AMC stock for a period of two years. In exchange, AMC agreed to pay APE $50 million in cash and to issue $50 million in new stock to APE.
The Court Ruling
However, in April 2023, a Delaware court ruled against the settlement. The court found that the settlement was not in the best interests of AMC’s shareholders, and that the terms of the settlement were too favorable to APE. The court also found that the settlement did not adequately address the allegations of a “short squeeze” by APE.
The Aftermath
Following the court’s ruling, AMC and APE have been unable to reach a new settlement agreement. As a result, the dispute between the two companies remains unresolved.
The court’s ruling has also had a significant impact on AMC’s stock price. Since the ruling, AMC’s stock has dropped by more than 20%, and the company’s market capitalization has fallen by more than $1 billion.
The Future of the Dispute
It is unclear what the future holds for the dispute between AMC and APE. The two companies have yet to reach a new settlement agreement, and it is possible that the dispute could continue for some time.
In the meantime, AMC’s stock price remains volatile, and the company’s future remains uncertain. It is possible that the dispute could be resolved in the near future, but until then, AMC’s shareholders will have to wait and see what happens.