A judge is weighing a dispute between AMC Entertainment, the troubled movie-theater chain that capitalized on the enthusiasm of meme-stock investors to help it survive the COVID-19 pandemic, and some of those same investors who have turned against it, WSJ Pro Bankruptcy reported. A two-day hearing in the Delaware Chancery Court concluded Friday, with nearly 3,000 individuals who own shares in AMC having written letters, filed objections or appeared in court to object to the terms of a settlement over a set of equity transactions planned by the company. John Barton, an Air Force veteran who owns AMC shares, said during the first day of the hearing on Thursday, “I speak to you today hoping to represent the 3.8 million individual investors that are about to find themselves at a loss, saving AMC and its theaters.” “My fear is that the individual investors are going to be caught holding the bag, not making the money that the shorts and AMC will during this conversion event,” Barton said. Vice Chancellor Morgan Zurn, the judge overseeing the case, is expected to issue a ruling within weeks. The dispute centers on the company’s planned transactions to convert its AMC preferred equity units, known as Apes, into common shares, as well as to conduct a 10-for-1 reverse-stock-split. AMC has said that these transactions would enable it to raise money by selling additional shares, and that it might need the liquidity buffer to avoid bankruptcy as it continues to struggle with its heavy debt load amid uncertain cinema industry conditions.
