This week, AMC Entertainment reached a settlement on the company’s motion to convert its special class of “APE” shares into regular AMC shares. The settlement allows the company and its shareholders to move beyond the “APE” experiment, in which AMC issued special shares at the height of the pandemic in order to raise money from retail investors without the approval of its existing common stock shareholders.
While a majority of AMC shareholders voted to allow the company to move ahead with the conversions, a certain number of “APE” stock shareholders filed suit in an effort to block the process. The settlement reached between CEO Adam Aron and the “APE” shareholders was a big relief for CEO Adam Aron, who viewed it as a critical step in shoring up the company’s financial foundation.
Alas, the judge presiding over the case notified the parties that the settlement would not be allowed, based on procedural irregularities. The door is still open for a second attempt at reaching a settlement if the process can be adjusted to the judge’s satisfaction.