COURT OF CHANCERY OF THE STATE OF DELAWARE
M ORGAN T

. Z URN V ICE C HANCELLOR L EONARD L. W ILLIAMS J USTICE C ENTER 500 N. K ING S TREET , S UITE 11400 W ILMINGTON , D ELAWARE 19801

- 3734 September 15, 2023

M ichael J . Ba rry , Esquire Grant & Ei s e nhofer P.A. 123 Justison Street, 7t h Floor Wilmington, DE 198 01 Raymond J. DiCamillo , Esquir e Richards, Lay ton & Finger, P.A. 920 North King Street Wilmington, DE 1980 1

Thomas Curry, Esquire Saxena Whi te P.A. 824 North Market Street, Suite 1003 Wi lm i n gton, DE 19801 G regory V. Varallo, Esquire Bernstein Lito

wi tz Berge r & Grossman LLP 500 Delaware Avenue, Suite 9 01 Wilmin gton, DE 19801

Theodore A. Ki ttila, Esquire Halloran Farka s + Kittila LLP 5 801 Kennett P ike , Suite C/D Wil mington , DE 19807 A ntho ny A. Rickey, E squire Marg rave Law LLC 3411 Silverside Road

, Sui te 104 Wilmington, DE 19810

RE : In r e AMC Ent e r

t a i n m e n t Hol

dings, Inc. Stockholder Litigation , Consol. C.A. N o. 2023

- 0215

- MT Z

D e ar C oun sel and Ms. Izzo :

I write to address objector Rose Izzo ’s motion for an award of attorney s ’ fees. 1 For the below reasons, I award Izzo ’ s counsel $ 212,700

. 00 in fees

. I also

a pprove Izzo ’ s requ est for a $3,000 incentive fee , to be paid out of her counsel ’ s fee

.

A. Ba ckgr ound
The parties to this action sought approval of a class action settlemen t that contemplat ed the payment of AMC Entertainment H o ldings Inc. ( “ AMC ” or the

“ Compan y ” ) common stock to cl ass m embers as consider ation for their release of certain claims (t he “ Settl ement Shares ”). At the time, the p laintiffs ’ counsel

1 D o c ket Item ( “ D .I

. ” ) 655 at Mot.In r e AMC En t

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estimated the value of the S ettlement S hares exceed ed $12 9 mi llion. 2 They sought a fee of $ 20 million

, or 15.5% of this value

. 3 Izz o appeared as a n obj ector and

ass ert ed a flurry of challeng es t o the proposed s ettl ement , including that the requested fee percentage was excessive

. 4 S h e also argued that settlement approval

c ould ha ve an adver se effect on th e Co mpany ’s stock pri ce, and so the aw ard of attorneys ’ fees sh ould be derived from a po st

- se ttl em e nt approval valuation of the S e ttlement Shares

. 5 I approved the settleme nt and fix ed the fee percentage at 1 2 %
, to be applied upon issuan ce and valuation of th e Settle ment Shares

. 6

The Settlement Shares have sin ce been issued . P ursuant to my instructio ns, t he pa rt ies agreed the value of the Settlement Share s to the class was $47,992,395.5 4

. 7 A 12% fee based on that figure totals $5,759,087.46

, represent ing a more than $14 million discount from the or iginal request. 8

I zzo now claims credit for that di scount

. S h e seeks $650,000 in attorneys ’ fees and a $3,000 in centive fe e for Izzo to be paid out of h er counsel ’ s fee

. The parties took no po sition o n Izzo ’ s reques t s

. 9

2 D.I. 206 at Op. Br. 3 0

– 31.

3 Id. at 51

, 57

.
4 D.I. 450 at Corrected Tra nsmit tal Aff

. of Th omas Curry in Su pport of Pl s

. ’ Reply in Further Supp

. of Settle men t , Award of Att ’ y s ’ Fees and Expenses, and Incen tive Awards

, Ex. 2 a t 53

– 54 [hereinafter “Izzo Obj.”]

.
5 Id. at 47

– 48.

6 In re AMC Ent. H

ldgs. , Inc. S ’ holder Litig.

, 20 23 WL 51 65606, a t * 4 0 (Del. Ch. Aug. 11, 2023)

. The August 11 opinion is also available at dock et i t em 615. For a more compl ete recitation of the brief yet extensive his tory of t h is l itigation , I refer readers to my July 22 and August 11 opin ions in this matt er

. In r e AMC En t. Hldgs., Inc. S ’ holder L itig.
, — A.3d

— , 2023 WL 4677722 (Del. C h. July 21, 2023) ; In re AMC

, 2023 WL 5165606

. The July 21 o pin ion is al so available at docket item 58 1

.
7 D.I. 663 at 3

.
8 Id. ¶ 1.

9 D. I. 658, Ex. A.In r e AMC En t

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B. Analysis

“ [A ] litigant or a lawyer who recover s a common fund for the benefit of
per sons other than himself o r his client is entitled to a reason able attorney ’ s fee from the fund as a whole. ” 10 T he Court has “ consid era ble discretion when deciding the appr opriate fee award. ” 11 In exercising that discretion, the Court will apply the Sug a rla nd factors , which inclu de: “ 1) the results achieved; 2 ) the ti me and effort o f counsel; 3) the relative complexities of the litigation; 4) any contingency factor; and 5) the standing and ability of counsel involved. ” 12 The most important factor is t he ben efit creat ed by the li t iga nt. 13

1. The Bene fit Achieved

I begin by determining wh ether Izzo was res ponsible for t he reduction in
at torneys ’ fees. As stated, the p lai ntiffs ’ counsel originally request ed a fee equal to 15.5 % of the value o f the Settlement Shar es , which the plaintiff s est imated exceeded $129 millio n . Izzo advocated for that percentage to be cut to 10% , and for the valu ation of the Settlement Shares to b e reduced . I ultimately awarded 12 % of the value of the S ettlement S hares at the ti m e they w ere paid

. The market , and

so the parties, valued the Settlement Shares at substantially less than Plaintiffs ’ counsel had predicted

. The lower percentage, and mor e significantly the lower value

, resulted in a considerable fee reduction. Izzo argu e s that she contri but ed to this reduction in three ways.

Fir st, Izzo takes credit for the de cision to defer valuing the Settlement Share s until they were issued to th e class

. He r objection argue d that AMC ’ s retail
stoc kholder base woul d consider the consummation of th e se ttlement agreement as

10 Americas Mining Corp. v. Theriault

, 51 A.3 d 1213, 1252

– 53 (Del. 2012) ( internal quotation marks omitt ed) ( quo ting Boeing C o . v. Van Gemert , 444 U.S. 472, 478 (1980) ) ; K orn v. New Castle Cnty. , 922 A.2d 409, 4 12 (D el. 2007) ( “ The ‘ common fund ’ exception enables a liti g ant who s ucceeds in con ferring a monetary benefit upon an ascertainable class o f individ uals to recover cost s from the fund that he or she created. ” )

.
11 Gri ffit h v. Stein ex rel. Goldman Sachs Grp., Inc. , 283 A.3d 1124, 1139 (Del. 2022)

.
12 A mericas Mining , 51 A.3d at 1254

.
13 Id. ( “ Delaware courts have assigned the gre a test weight to the benef it achiev ed in litigation. ” ).In r e AMC En t

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a “ bet r ayal ” and divest their holdi ngs , causing the market price to “ tumble

. ” 14 Izzo argued th at the plaintiffs ’ counsel shou ld bear some o f this particular risk

, suggesting that “ the most easily administrable so lution would be to rul e first on the Settlement an d then , if it becomes final, address Plaintiffs ’ fee petition after the [conversion of preferred shares into com mon ]

. ” 15

I f ound, and still find, I zzo ’ s reas oning to delay v a luing the sett lement consider ation unpers ua sive

— she proff ered no evidence to support her predicted

mass exod us of ag grieved retail investors a nd a resulting material impact on A MC ’ s common stock price

. 16 I d ecide d to defer valuation of the Settlement Shares and therefore t he fee , but for differen t reasons

. Having found there was no need to definitively value th e Settlement Shares for pur poses of settlement approval , I deferred valuation of the S ettl ement Shar es until the tim e they were issued to the clas s . As I explained in approving the settlem ent :

Under these circumstances, speculatin g as to the future value of a share of AMC common stock ma kes little sense. I l eave it to th e parties to confer on the value of the Settlement Shares as crystallized
at t he time those shar es are issued, and on wha t 12% of t hat value represents. The parti es should derive Plaintif fs’ counsel ’ s fee from the c losin g price of AMC common stock on the date Settlement Share s are issue d. 17

Iz zo ’ s obje ction on this point was not hel pful , a nd the fact we rea ched the same

con c lu sion alo ne does not warrant a n award of attorneys ’ fe e s. 18

Second

, Izzo argued that the settlement was an early

- stage settlement,

mer i t i ng a fee award of 10 % to 15%. In determining that the plaintiffs ’ fee request

was exce ssive , I explained that “ [w] hile the settlemen t followed highly expedited written and document discovery, the settl ement is still an early

- stage settlement ”

14 Izzo Obj. 47.

15 Id. at 48.

16 This is tru e notwithstanding the fac t that AMC ’ s common st ock price declined following settlement ap proval.

17 In re AMC

, 2023 WL 5 165 6 06, at *40

.
18 Griffith , 283 A.3d at 1139

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and that “ [t] he most ju stif iable ‘ paid separatel y ’ percent age is 13%. ” 19 Again, Izzo and I reached the s ame conclusion, bu t her arg ument was too underdeveloped to be persuasive or useful.

T h ird , Izzo alerte d the Co urt to the existence of Seb Inv estment M anagem e nt AB v. Symante c Corp.

, a C a lifornia decis ion that a ddressed concerns that the pla intiffs ’ counse l and their client in that c ase “ engaged i n a pla y to pay

. ” 20 Th ere , the District Court for the Northern Distr ict of California ordered the parties to allow c lass members a new opportunity to opt out of the class after finding “ no clear

- cut evidence o f a qu id p ro quo emerged, [though ] d iscovery did show th at [ Ber n s t ein Lito wi t z Berger & Grossman LLP ’ s ] i nitial explanation to the Court proved misleading

. ” 21 It held th at “ in future cases, [ Ber n s t ein Litowi t z Berger & Grossman L LP ] in seeking appoi ntment as class counsel shall bring thi s o rder to the at tention of the ass igned judge and the decision

- maker fo r the lead plaintif f who is to select counsel. ” 22 The plaintiffs ’ counsel fail ed to bring this ruling to my attention , a nd I considered this fact in my con sideration of counsel ’ s stand ing

. 23

Together, several factors w eighing on the plaintif fs ’ counsel ’ s standin g resulted in a 0 .5% reduction in their f ee award. That 0 .5% reduction r eflects savings of $239,961.98

. I expressly considered three sep arate inputs to th at down ward a djustmen t , of which the nondiscl osure of the California case was one

. Thus, I conclude th a t Izzo was resp onsible for one third , or $79,987.33

, of the resulting reduction

.

2. The Secondary Sugarland Fa ctors

I now t ur n to the se condary Sug arland factors as applied t o tha t benefit to the class and AMC

. “ Secondary factors include the co mplexity of the litigation,

19 In re AMC

, 2023 W L 5165606, at *37 ( quoti ng In re Dell Techs. Inc. Class V S ’ holders Litig.

, 2023 WL 4864861, at *34 (Del. Ch. July 31, 2023) ).

20 Seb Inv. Mgmt. AB v. Symantec Co r p. , 2021 WL 154 0996, at *1 (N .D. Ca l. Apr. 20, 2021)

.
21 Id. at *2

.
22 Id.

23 In re AMC

, 2023 WL 51656 0 6, at *39

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the standing and skill of coun sel, and the contingent nature of the fee arrangeme nt toget her with the leve l of contingency risk actually involved in the cas e

. ” 24

I n my August 11 decision , I explained that “ [t] his litigation was b oth

c omplex and challenging

, ” and that the plain tiffs “ filed cl aims applying a novel legal theory, crafted in a changing legal land scape, to soph isticated financial engineering. ” 25 Izzo w as faced wit h substantially similar legal c hallenges

, and the complex ity o f th e litigation warrants an upward adjustm ent. 26 I zzo ’ s c ounsel , who

a re know n to and respected by th is Court, u ndertook this representatio n on a contingency fee basis

.
I find that a o ne

- third contingency fee is appropriate. 27 Applying a one

- thir d

co ntingency fee to the $79,987.33 benefit Izzo caused entitles Iz zo to an award o f
approx imate ly $27, 7 0 0 .00

.

3. Additional Benefits

But Izzo ’ s counsel did mor e than se cure a be nefit for the cl ass : they were helpful to the Court. When a c ase se ttle s , the parties seeking approval of their settleme nt drop their adversari al weapons and work together t o wards the common goal of securing settlement approval. This on e

- handed clapping makes it more d ifficu lt for the Court to ensure that the proposed settlement is fair

. Obj ecto rs can assist the Cour t by scrutinizing the p arties ’ agreement and identifyi ng issues that might betray i ts un fairness to absent class mem bers. 28

24 Judy v. Preferred Commc ’ n Sys., Inc.

, 201 6 WL 49 92687, at *15 (Del. Ch. Sept. 19, 2016 )

.
25 In re AMC

, 2023 WL 5165606, at *3 8

.
26 In re Ac t ivisio n Blizzard, In c. S ’ holder Li tig. , 124 A.3d 1025, 1072 (Del . Ch. 2015) ( “ All else equal, litig ation that is challenging and complex supports a higher fe e awa rd. ” )

.
27 See S tein v. Blankfein

, 2019 WL 2750100, a t *2 (Del. Ch. July 1, 2019)

.
28 See In re Amst e d Indu s. Inc. Li tig.
, 1988 WL 92736, at *11 (Del. Ch. Aug. 24, 1988) ( “ This effort, while it fa iled to wi n acceptance of his position, contributed to the class in increasing t h e assurance that a fair compromise had been reached

. ” ), aff ’ d sub nom. Barkan v

. Amste d Indus., Inc. , 567 A.2d 1279 (Del. 1989)

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In most cir cumstances, even wher e an o bjector offer s such assistance, her counsel is typically entit led to fees only wher e “ his efforts improved t he final settlement or he conferred a b enefit on the class. ” 29 But in “ a very r are case

. . . an

o bjec tor will be awarde d a fee on the basis th at he did benefit the class by substantially assisting the court i n its evaluation of t he proposed settlement

. ” 30

This is one of those very rare cases. The parties reached their settlement and urged expedited ap prov al before the disc overy record was pres en ted to the Court

, and the absent class members were vocal and dive rse and unrepresented. Izzo ’ s work prov ided t he adversarial perspective of Delaware attorney s on a n ex p edi ted and complex settlem ent that posed seve ral novel p rocedural and substantive di ff iculties. Izzo ’ s counsel fought for access to and the n reviewed t he discovery record , filed a comprehensive a n d multifaceted objection, took exception s t o the Special Master ’ s r eport a nd recommendation

, and zealous ly advocat ed for her
many posi tions at th e heari ng

. To be sure, some of her challenges were weak

, and

serv e d more as a distraction rat her than a helpful check on the merits of the settlement

. 31 Nevertheless, it is clear that Izzo took a serious, th orough look into the merits , which were far fr om straightforward

.
A n d Izzo weighed i n on not only the merits of t he settlement, but also other issues the Court had to address on the path to the m erits

. S he offered represented advocacy on objector access to discovery 32 and the withdrawal of one of the

re presentative pla intiffs

. 33

29 Schultz v. Ginsburg , 965 A.2d 661, 670

– 71 (D el. 2009), overruled on oth er grounds by Urdan v. WR Cap. P ’ rs , LLC , 244 A.3d 66 8 (Del. 2020)

.
30 Amsted Indus.

, 1988 WL 92736, at *12 ; see also In re Riverbed Tech., Inc. S ’ hold ers Litig.
, 20 15 WL 7769861 , at * 3 (Del. Ch. Dec. 2, 2015)

.
31 See, e.g.

, Izzo O bj. 1 3

– 19 ( explaining why each repres en tative plaintiff is not an

“ Ape ” ).

32 D.I. 31 1 at Ltr.

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Under t hese rare circumstances

, and g auging the extent to w hich Izzo ’ s work was helpful to the Court, the forgoing warrants a fe e award of $1 85,000.00, equ al
to a rou nd two

- th irds of her counsel ’ s lodesta r of $277,960.00

. 34

This leaves the question of who should pay that fee. Izzo did not suggest who sh ould pay , and her proposed order le aves the questio n open. 35 When Izzo presented her motion to the parties , they took no position. Izzo ’ s counsel ’ s advocacy was helpful to the Cou rt in part due to th e lack of adversarial advocacy b etween the p arties in the settlement context . And so I believe it is fair , and within my discretion, to split the objector ’ s fee between the defendants and the pla intiff s ’ counsel.

4. I z zo ’ s In centive Fee

Izzo has requested an incentive fee of $3 ,00 0 to be pa id out of any fee award to her coun s el. The Court may grant incentive awards to representative plaintiffs wher e justified by the factors identified in Raider v. Sunderland : (i) the “ time, effort and e xpertise e xpended by the class represe ntativ e,” and (ii) the “benefit to the class.” 36 She points out she was an active litigant , atten ded the settlement he aring, and , like the representative plaintiffs

, “ endured an unusual level of hara ssment. ” 37 As expla ined in my A u gust 11 d ecision, this was a di fficult case for all involved

. 38 Under the unique circumstances of this case, Izzo ’ s re quested fee is warranted.

C. Conclusion

Izzo ’ s counsel is enti t led to a fee awa rd of $27,700 .00 for the re duction in attorney s ’ fees, to be paid by the Company

. Her counsel is also ent itled to

34 D.I. 655 at Mot. ¶ 27.

35 D.I. 655 at Pro posed Order ¶ 3.

36 Raider v. Sun derland

, 2006 WL 75310, at *2 (Del. Ch. Jan. 4, 2006)

.
37 D.I. 655 at Mot. ¶ 31.

38 In re AMC

, 2023 WL 5165606, at *41 n.367 (explaining the requested $5,000 incentive fees may be low co nsidering, among ot her things, “ Plaint iffs, like their cou nsel and the C ourt, were subject to an unusual level of harassment from the tim e of filing the

com plaints throug hout this settlemen t process ” ).In r e AMC En t

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$185,000.00 , to be split between the defendants and plaintiffs ’ counsel. 39 Izzo is to be paid an ince n tive fee of $ 3,000 from that amount

. To the extent an order is
necessary , IT IS SO ORDE RED.

Since r e ly,

/ s/ Mor g an T. Z urn

Vice Ch an cellor

M TZ/m s

cc : All Coun sel of Rec o rd

, v ia Fi l e & S e r ve Xp res s

39 Izzo did not s eparately request expenses , and so no separate award of expenses will be issue d.