IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN RE AMC ENTERTAINMENT 

HOLDINGS, INC. STOCKHOLDER 

LITIGATION

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)

)

Consol. C.A. No. 2023-0215-MTZ

MEMORANDUM OPINION

Date Submitted: July 26, 2023

Date Decided: August 11, 2023

Gregory V. Varallo, Daniel E. Meyer, BERNSTEIN LITOWITZ BERGER & 

GROSSMAN LLP, Wilmington, Delaware; Mark Lebovitch, Edward Timlin,

BERNSTEIN LITOWITZ BERGER & GROSSMAN LLP, New York, New York; 

Michael J. Barry, Kelly L. Tucker, Jason M. Avellino, GRANT & EISENHOFER, 

P.A., Wilmington, Delaware; Thomas Curry, SAXENA WHITE P.A., Wilmington, 

Delaware, Attorneys for Plaintiffs Allegheny County Employees’ Retirement 

System and Anthony Franchi.

Raymond J. DiCamillo, Kevin M. Gallagher, Matthew W. Murphy, RICHARDS, 

LAYTON & FINGER, P.A., Wilmington, Delaware; John A. Neuwirth, Joshua S. 

Amsel, Tanner S. Stanley, WEIL, GOTSHAL & MANGES LLP, New York, New 

York, Attorneys for Defendants AMC Entertainment Holdings, Inc., Adam M. Aron, 

Denise Clark, Howard W. Koch, Jr., Kathleen M. Pawlus, Keri Putnam, Anthony 

J. Saich, Philip Lader, Gary F. Locke, Lee Wittlinger, and Adam J. Sussman.

ZURN, Vice Chancellor.
1

Common stockholders of AMC Entertainment Holdings, Inc. (“AMC” or the 

“Company”) brought direct claims on behalf of a putative class of common 

stockholders, and have reached a settlement with the defendants, AMC’s directors

and the Company. 

The settlement consideration consists of additional shares of common stock 

awarded to current common stockholders to offset the dilutive effects of the conduct 

underlying the plaintiffs’ claims. In return, the plaintiffs and defendants suggest the 

class should release claims relating to that conduct. As Delaware law requires, the 

parties submitted the settlement terms to the Court for approval. The plaintiffs’ 

counsel have also requested fees based on the settlement’s benefit to AMC’s

stockholders.

This is my second opinion considering the settlement terms. The first was 

issued on July 21, 2023, and declined to approve the settlement because the release 

was unsound (the “July 21 Opinion”).1 This opinion adopts the defined terms used

in the July 21 Opinion, assumes the parties’ familiarity with the July 21 Opinion, 

and refers readers to that decision for the necessary background regarding the 

underlying transactions and this litigation. 

The day after the July 21 Opinion, the parties cut the offending provision from 

1

In Re AMC Ent. Hldgs., Inc. S’holder Litig., --- A.3d ---, 2023 WL 4677722 (Del. Ch. 

July 21, 2023). The July 21 Opinion is also available at Docket Item (“D.I.”) 581.
2

the release and asked the Court to consider the settlement as revised. This opinion 

considers that revised settlement.

The Court’s consideration of a proposed settlement comprises four tasks. 

First, the Court must determine whether the class should be certified under Court of 

Chancery Rule 23, and if it should be certified as opt-out or non-opt-out. In this 

opinion, I certify the class as a non-opt-out class under Rules 23(a), 23(b)(1), and 

23(b)(2). I decline to afford the right to opt out. 

Second, the Court must review the adequacy of notice of the proposed

settlement to the class. I conclude the notice was sufficient and its delivery was 

adequate. Under Delaware law, only stockholders of record are required to receive 

notice when the class is certified as a non-opt-out class. Here, comprehensive 

electronic notice, coupled with supplemental but imperfect postcard notice, was 

adequate notice under Delaware law.

Third, the Court must review the terms of the proposed settlement for 

reasonableness, and determine whether to approve it. I conclude the settlement is 

reasonable. While the plaintiffs’ fiduciary duty claim had merit, a remedy for that 

claim that is equitable and beneficial to the class overall is challenging to identify. 

The plaintiffs’ statutory claim had no merit. The release of those claims, and others 

with the identical factual predicate to the plaintiffs’ complaints, is sufficiently 

supported by the settlement consideration. 
3

And finally, if the settlement is approved, the Court must resolve the

plaintiffs’ petition for an award of attorney’s fees and expenses. I award plaintiffs’ 

counsel fees worth 12% of the settlement consideration. The plaintiffs’ requests for 

modest incentive awards is granted. 

An objector moved for a stay pending appeal if the settlement was approved, 

indicating an intention to appeal the July 21 Opinion’s holding that the release does 

not improperly release future claims. This opinion concludes such a stay would not 

be appropriate. 

I. BACKGROUND2

The day after the July 21 Opinion, the parties amended the release in the 

2 Citations in the form of “D.I. —” refer to docket items in In re AMC Entertainment 

Holdings, Inc. Stockholder Litigation, C.A. No. 2023-0215-MTZ (Del. Ch.), formerly 

Allegheny County Employees’ Retirement System v. AMC Entertainment Holdings, Inc., et 

al., C.A. No 2023-0215-MTZ (Del. Ch.). Citations in the form of “2023-0216, D.I. —” 

refer to docket items in Usbaldo Munoz, et al. v. Adam M. Aron, et al., C.A. No. 

2023-0216-MTZ (Del. Ch.). Citations in the form of “Hr’g Tr. —” refer to the Settlement 

Hearing held on June 29 and 30, 2023. D.I. 578; D.I. 579.

The facts are drawn from the allegations of the Allegheny complaint, the operative 

complaint, “from the affidavits and supporting documents submitted in connection with 

the application for court approval,” and public filings. D.I. 1 [hereinafter “Non-Op. 

Compl.”]; 2023-0216, D.I. 1 [hereinafter “Op. Compl.”]; In re Activision Blizzard, Inc. 

S’holder Litig., 124 A.3d 1025, 1030 (Del. Ch. 2015); In re Rural Metro Corp. S’holders 

Litig., 2013 WL 6634009, at *7 (Del. Ch. Dec. 17, 2013) (“Applying [Delaware] Rule [of 

Evidence] 201, Delaware courts have taken judicial notice of publicly available documents 

that ‘are required by law to be filed, and are actually filed, with federal or state officials.’” 

(quoting In re Tyson Foods, Inc. Consol. S’holder Litig., 919 A.2d 563, 584 (Del. Ch. 

2007))); accord Wal–Mart Stores, Inc. v. AIG Life Ins. Co., 860 A.2d 312, 320 n.28 (Del. 

2004) (holding that the court may take judicial notice of public documents such as SEC 

filings that are required by law to be filed).
4

Proposed Settlement.3 They filed a joint letter asking the Court to take the revised 

terms under advisement without requiring additional formal notice to the putative 

class, to continue to stay proceedings against the defendants, and to ultimately 

approve the Proposed Settlement.

4

 AMC announced the amendment the next

business day, July 24.

5

 

That same day, objector Rose Izzo filed a “Motion for Clarification of the 

Scheduling Order or, Alternatively, for Maintaining of Status Quo Order Pending 

Appeal.”6 Izzo reiterated her desire to become lead plaintiff and sought clarification 

as to whether the July 21 Opinion was a “final determination” so she could “file a 

prompt motion to intervene.”7 If the July 21 Opinion was not a “final 

3 D.I. 582.

4

Id. at 2–3 & n.1.

5 AMC Entertainment Holdings, Inc., Current Report (Form 8-K) (July 24, 2023) (“On July 

22, 2023, the parties filed an addendum to the Stipulation in an effort to address the issues 

with the scope of the release raised by the Court and requested that the Court approve the 

settlement with the revised release set forth in the addendum.”). AMC and Plaintiffs’ 

counsel posted the parties’ July 22 letter on their respective websites. Presentations, AMC 

THEATRES INVESTOR RELATIONS, https://investor.amctheatres.com/financialperformance/presentations/default.aspx (last visited Aug. 9, 2023); Settlement Information, 

GRANT & EISENHOFER, P.A., https://www.gelaw.com/settlements/amc (last visited 

Aug. 9, 2023); AMC Case Documents, FIELDS KUPKA & SHUKUROV LLP, 

https://fksfirm.com/case-notices/ (last visited Aug. 9, 2023); Related Cases, BERNSTEIN 

LITOWITZ BERGER & GROSSMAN LLP, https://www.blbglaw.com/news/updates/2023-04-

03-blbg-secures-additional-shares-for-amc-stockholders-in-landmark-recapitalizationsettlement (last visited Aug. 9, 2023). 

6 D.I. 583.

7

Id. ¶¶ 2–3, 5.
5

determination,” Izzo sought a stay pending appeal if the Proposed Settlement were

approved.

8

Later that day, the Court granted the parties’ request to stay proceedings 

against the defendants pending this Court’s consideration of the Proposed 

Settlement; concluded no additional notice was necessary; explained the July 21 

Opinion was not a final determination; directed the parties to respond to Izzo’s 

motion to stay this action pending appeal; and requested supplemental briefing “on 

the effect of the Delaware Supreme Court’s June 28, 2023 decision in Coster v. UIP 

Companies, Inc. on the Proposed Settlement and [P]laintiffs’ breach of fiduciary 

duty claim.”9 I also asked the parties to “advise, with as much detail as possible, as

to any events or circumstances compelling a decision by a certain date.”10 On July 

25 and 26, the parties responded.

11

 On July 31, Izzo filed her reply in support of her 

8

Id. ¶¶ 6, 15.

9 D.I. 587 at 6 (citing Coster v. UIP Cos., Inc. (Coster IV), --- A.3d ---, 2023 WL 4239581 

(Del. 2023)).

10 Id. at 5.

11 D.I. 589; D.I. 591; D.I. 592; D.I. 593; D.I. 595. My letter also highlighted the parties’ 

delay in addressing the issue with the Release that I had raised at the hearing on June 29. 

The parties did not respond on that point; instead, the defendants requested a decision on 

the recut settlement by “the late part of July or early August.” D.I. 595 at 2, 4. This is the 

most recent example of the parties’ habit of moving slowly while pressing this Court for 

expedited treatment. See, e.g., D.I. 163 (writing to the parties to ask if they were going to 

file the settlement papers for the proposed settlement they had announced nearly two weeks 

prior), with D.I. 217 at 18–19 (asking the Court to “truncate” the settlement schedule); 

D.I. 59 ¶ 3 (asking the Court to lift the status quo order “so the issuance of new shares to 

Common Stockholders can take place at the earliest possible date”); id. ¶¶ 20, 32 (seeking 
6

motion.12

Aside from the addendum to the Stipulation and the supplemental briefing I 

requested, the record closed on June 30.13 I have not considered efforts to cure 

noncompliant Objections or other submissions after that date.

14

II. ANALYSIS

“Although Delaware law has traditionally favored a voluntary settlement of 

contested claims, the settlement of claims raised in a class action require certain 

safeguards to ‘insure that the interests of parties who are before the Court only 

vicariously are not inequitably abrogated.’”

15 Under Court of Chancery Rule 23(e), 

“class action[s] shall not be dismissed or compromised without the approval of the 

performance of the proposed settlement “at the earliest possible date,” including before 

noticing the settlement and receiving Court approval under Rule 23). Despite the parties’ 

torpor, I have done my best to issue this opinion quickly.

12 D.I. 604.

13 D.I. 570.

14 See, e.g., D.I. 603.

15 Rinaldi v. Iomega Corp., 2001 WL 34890424, at *5 (Del. Super. June 29, 2001) (citations 

omitted) (citing Nottingham P’rs v. Dana, 564 A.2d 1089, 1102 (Del. 1989), and Polk v. 

Good, 507 A.2d 531, 535 (Del. 1986), and then quoting Donald J. Wolfe, Jr. and Michael 

A. Pittenger, Corporate and Commercial Practice in the Delaware Court of Chancery § 9-

4[a] (2000))); id. (“If settlements of pending litigation are the cherished offspring of the 

law, settlements of representative actions are no doubt the least ingratiating of the brood.”

(quoting Donald J. Wolfe, Jr. and Michael A. Pittenger, Corporate and Commercial 

Practice in the Delaware Court of Chancery § 9-4[a] (2000))); 2 Donald J. Wolfe, Jr. and 

Michael A. Pittenger, Corporate and Commercial Practice in the Delaware Court of 

Chancery § 13.03[a] at 13-11 (2d ed. 2022) (same).
7

Court, and notice . . . to all members of the class.”16 The Court must consider

whether the terms of the settlement are fair and reasonable, recognizing that “[t]his 

Court generally favors settlement of complicated litigation.”17 

“When parties have reached a negotiated settlement, the litigation enters a

new and unusual phase where former adversaries join forces to convince the court

that their settlement is fair and appropriate.”18 “The settlement’s proponents bear

the burden of persuasion by a preponderance of the evidence.”19 “[I]n most

instances, the court is constrained by the absence of a truly adversarial process, since

inevitably both sides support the settlement and legally assisted objectors are rare.”20

16 Ct. Ch. R. 23(e).

17 Gatz v. Ponsoldt, 2009 WL 1743760, at *2 (Del. Ch. June 12, 2009) (citing In re 

Countrywide Corp. S’holders Litig., 2009 WL 846019, at *10 (Del. Ch. Mar. 31, 2009)); 

accord id. (“However, the settlement of a class action is unique because the fiduciary nature 

of the class action requires the Court of Chancery to participate in the consummation of 

the settlement to the extent of determining its intrinsic fairness.” (alterations and internal 

quotation marks omitted) (quoting Rome v. Archer, 197 A.2d 49, 53 (Del. 1964), and citing

Nottingham, 564 A.2d at 1102)).

18 Ginsburg v. Phila. Stock Exch., Inc., 2007 WL 2982238, at *1 (Del. Ch. Oct. 9, 2007); 

cf. In re Trulia, Inc. S’holder Litig., 129 A.3d 884, 893 (Del. Ch. 2016) (“Once an 

agreement-in-principle is struck to settle for supplemental disclosures, the litigation takes 

on an entirely different, non-adversarial character. Both sides of the caption then share the 

same interest in obtaining the Court’s approval of the settlement.” (footnote omitted)).

19 In re TD Banknorth, 938 A.2d 654, 658 n.4 (Del. Ch. 2007) (citing In re First Boston,

Inc. S’holders Litig., 1990 WL 78836, at *9 (Del. Ch. Jun. 7, 1990)).

20 In re Caremark Int’l Inc. Deriv. Litig., 698 A.2d 959, 961 (Del. Ch. 1996).
8

Typically, the Court considers whether to approve a settlement in steps.21 

First, it determines whether it can certify the putative class under Rules 23(a) and

23(b). If the Court certifies a class, it next examines whether the notice of the

settlement that the parties provided to the class was sufficient to satisfy the

requirements of due process. If it finds that notice was adequate, it moves on to

considering whether the settlement terms fall within a range of reasonableness. If

they do, then the Court will approve the settlement. Only then will the Court

determine whether to award fees and expenses to the plaintiff’s counsel and

incentive awards to the representative plaintiff.

For the reasons that follow, this opinion concludes: the class is certified under

Rules 23(a), 23(b)(1), and 23(b)(2); an opt-out right is not warranted given the

Proposed Settlement’s structure; notice was adequate; the Proposed Settlement is

reasonable; counsel earned monetary fees equal to 12% of the consideration at the

time the consideration is paid; and incentive awards are granted out of that fee award.

21 See, e.g., Activision, 124 A.3d at 1043 (“The tasks assigned to the court include 

(i) confirming that the Settlement is properly structured, (ii) ensuring that adequate notice 

has been provided, (iii) assessing the reasonableness of the ‘give’ and the ‘get,’ as well as 

the allocation of the ‘get’ among various claimants, (iv) approving an appropriate award of 

attorneys’ fees, and (v) authorizing any payment from the fee award to the representative 

plaintiff.”); CME Grp., Inc. v. Chi. Bd. Options Exch., Inc., 2009 WL 1547510, at *4 (Del. 

Ch. June 3, 2009) (“The Court starts with consideration of whether class certification is 

appropriate and whether the Settlement in gross should be approved. It then turns its 

attention to the various specific objections to the terms of the Settlement.”).
9

A. Objections To The Proposed Settlement And Exceptions To 

The Special Master’s Report

Once again, the Court expresses gratitude to the Special Master and her team, 

whose hard work was described more fully in the July 21 Opinion. That opinion 

also describes the requirements to submit a compliant Objection to the Proposed 

Settlement and compliant exception to the Special Master’s Report. As noted there, 

thirteen exceptions to the Report were timely filed; ten were compliant.22 That 

opinion addressed only the release of APE claims; because no compliant Objection 

raised the issue of APE claims being included in the Release, the compliant 

Objections and exceptions did not inform that decision.23 The July 21 Opinion did 

22 AMC, --- A.3d ---, 2023 WL 4677722, at *27 & n.204; D.I. 580 ¶ 7. See also infra

(discussing Karen Grelish’s exception’s compliance).

On July 24, Brian Tuttle filed a letter arguing the Court improperly categorized his 

Objection as non-compliant, and requesting that the Court consider an earlier filing, 

D.I. 573, as an Objection “to the amended settlement.” D.I. 584 at 1 (emphasis in 

original). Tuttle has already filed exceptions asserting he submitted a compliant objection, 

and the Court ruled he failed to comply with the proof of ownership requirements. AMC, 

--- A.3d ---, 2023 WL 4677722, at *27 n.204. The Court is not accepting objections to the 

revised Proposed Settlement, so Tuttle’s request to treat another filing as an objection is 

denied. D.I. 587 at 6 (citing Keepseagle v. Vilsack, 102 F. Supp. 3d 306, 313 (D.D.C. 

2015)).

23 E.g., In re Cent. Banking Sys., Inc., 1993 WL 410421, at *2 n.2 (Del. Ch. Oct. 6, 1993) 

(“Rafton objected on other grounds as well, but those grounds are not relevant to the issue 

being decided here.”); Goldman v. Aegis Corp., 1982 WL 525016, at *2–3 (Del. Ch. 

May 3, 1982) (objections based on issues “not before [the] [c]ourt” are “without merit”);

cf. Trulia, 129 A.3d at 907 n.90 (“Because I reject the proposed settlement, I do not address 

the issue of class certification, although stockholder classes in cases such as this are 

typically certified.”).
10

dismiss exceptions asserting the Special Master failed to give each Objection due 

attention.24 

On July 27, stockholder Karen Grelish submitted a filing contesting the July 

21 Opinion’s finding that her Objection, and thus her exception, were 

noncompliant.25 The next day, I stated I was treating her filing as a motion for

reconsideration and set a briefing schedule pursuant to Rule 59(f).26 On August 4, 

Plaintiffs filed a response making clear that Grelish’s Objection was compliant under 

the more lenient standards summarized in the July 21 Opinion, her Objection was 

filed without including the proof of ownership she submitted, and “[d]ue to an error 

flowing from [her] multiple submissions,” only Grelish’s non-Objection 

communications were provided to the Special Master.

27

 I thank Plaintiffs for this 

clarification, and will consider Grelish’s exception as compliant. 

The compliant exceptions touch on a range of issues, including but not limited 

to: the adequacy of the notice, with a focus on postcard notice;28 the strength of the 

24 AMC, --- A.3d ---, 2023 WL 4677722, at *28.

25 Id. at *27 n.204; D.I. 598.

26 D.I. 600.

27 D.I. 608 ¶¶ 4–5; id. ¶ 5 (“On June 22, 2023, Plaintiffs’ counsel filed the Grelish Objection 

on the public docket, at her request. While it was filed without proof of ownership, also at 

Ms. Grelish’s request and per the Court’s prior guidance, Plaintiffs’ submissions noted her 

proof of ownership.” (footnotes omitted)); see AMC, --- A.3d ---, 2023 WL 4677722, at 

*28 & n.213. The parties do not object to the Court considering Grelish’s exception. D.I. 

608 ¶ 2; D.I. 609.

28 See, e.g., D.I. 560 at 1–2; D.I. 565 at 4.
11

claims and the value of the claims being released, or the “give” as compared to the 

“get”;29 the Special Master’s categorization of some purported stockholder 

correspondence as “inquiries”;30 the Special Master’s decision to give little weight 

to the volume of Objections;31 Plaintiffs’ counsel’s fee award;32 and whether the 

Special Master adequately reviewed and assessed each Objection.33 Some 

exceptions are largely untethered from the Report,34 or misunderstand the applicable 

standards in evaluating the reasonableness of a proposed settlement.35

I have conducted my own de novo analysis of the issues addressed in this 

opinion. I have also considered each compliant exception to the Special Master’s 

Report de novo, to the extent relevant to my decision today.36 My analysis follows.

B. Class Certification

I begin with Rule 23. “[C]lass certification involves a ‘two-step analysis.’ 

The first step, a prerequisite for class action certification, is that the action satisfy 

29 See, e.g., D.I. 546 at 4 ¶ 5; D.I. 547 ¶¶ 2–13; D.I. 556 [hereinafter “Izzo Exc.”], at 10–

28; D.I. 558 at 3–21; D.I. 565 at 5–9.

30 D.I. 552 at 3; see also D.I. 565 at 5.

31 See, e.g., D.I. 547 ¶ 14; Izzo Exc. at 28–32; D.I. 565 at 5.

32 See, e.g., Izzo Exc. at 38–42.

33 See, e.g., D.I. 547 ¶ 16; D.I. 553 ¶¶ 1, 5; D.I. 565 at 4–5.

34 See, e.g., D.I. 546; id. at 1 (stating he did “not read [the Special Master’s] 

recommendation in its entirety”).

35 See, e.g., D.I. 558.

36 DiGiacobbe v. Sestak, 743 A.2d 180, 184 (Del. 1999). 
12

each of the four requisites of Rule 23(a) . . . . The second step . . . requires 

determining whether the class action falls into one of three categories delineated in 

Rule 23(b).”

37

1. Court Of Chancery Rule 23(a)

For a class to be certified, “(1) the class [must be] so numerous that joinder of 

all members is impracticable, (2) there [must be] questions of law or fact common 

to the class, (3) the claims or defenses of the representative parties [must be] typical 

of the claims or defenses of the class, and (4) the representative parties [must] fairly 

and adequately protect the interests of the class.”38 Settlement proponents bear the 

burden of establishing each certification element.39 To the extent exceptions

engaged with Rule 23(a), they focused on whether Plaintiffs can fairly and 

adequately represent the class.40 

37 Leon N. Weiner & Assocs., Inc. v. Krapf, 584 A.2d 1220, 1224 (Del. 1991) (quoting and 

citing Nottingham, 564 A.2d at 1094–95).

38 Ct. Ch. R. 23(a).

39 Dieter v. Prime Comput., Inc., 681 A.2d 1068, 1071 (Del. Ch. 1996) (citing Rosen v. 

Juniper Petroleum Corp., 1986 WL 4279, at *1 (Del. Ch. Apr. 11, 1986)).

40 See, e.g., Izzo Exc. at 32–35.
13

a) Numerosity

Rule 23(a)(1)’s numerosity requirement may be satisfied by “numbers in the 

proposed class in excess of forty, and particularly in excess of one hundred.”41 As 

of the February 8, 2023 record date for the Special Meeting, there were over 517 

million shares of common stock outstanding.42 Strategic Claims Services served as 

the “Notice Administrator” and “mailed . . . post card notice to 16,382 record 

holders,” and “mailed or emailed approximately 2.8 million post card notices to 

beneficial holders of AMC Common Stock.”43 Joinder of the diffuse holders of 

hundreds of millions of shares is not practical. Numerosity is satisfied.

b) Commonality

Rule 23(a)(2) requires that “there are questions of law or fact common to the 

class.”44 Commonality is “met where the question of law linking the class members 

is substantially related to the resolution of the litigation even though the individuals 

41 Marie Raymond Revocable Tr. v. MAT Five LLC, 980 A.2d 388, 400 (Del. Ch. 2008)

(internal quotation marks and footnote omitted) (collecting authorities), aff’d sub nom. 

Whitson v. Marie Raymond Revocable Tr., 976 A.2d 172 (Del. 2009). 

42 Op. Compl. ¶ 155; D.I. 200, Defendants’ Brief in Support of Proposed Settlement 

[hereinafter “DOB”], Ex. W, AMC Entertainment Holdings, Inc., Proxy Statement 

(Schedule 14A) (Feb. 14, 2023) [hereinafter “Feb. 14, 2023 Proxy”], at 4.

43 D.I. 442, Affidavit of Paul Mulholland Concerning Mailing of Post Card Notice 

[hereinafter “Mulholland Aff.”], ¶¶ 4, 7; D.I. 531, Affidavit of Josephine Bravata 

Concerning Mailing of Post Card Notice [hereinafter “Bravata Aff.”], ¶ 4. The exhibits to 

the Mulholland and Bravata Affidavits are available at D.I. 443 and D.I. 531, respectively.

44 Ct. Ch. R. 23(a)(2).
14

are not identically situated.”45“Commonality is not defeated merely because the 

class members may have different interests and views, so long as the common legal 

questions are not dependent on divergent facts and significant factual diversity does 

not exist among individual class members.”46

Here, common questions of law include whether: (i) the defendants breached 

their fiduciary duties by (a) “coercing stockholders to vote with respect to the 

Certificate Proposals,” (b) “attempting to circumvent the franchise of the holders of 

the Common Stock,” (c) “transferring economic value from members of the Class 

to Antara and other holders of APEs”; (ii) “fail[ing] to seek approval from the 

common stockholders as a class for the creation and issuance of the Preferred Stock”

violated Section 242(b); and (iii) Plaintiffs and the class have been injured by the 

defendants’ conduct.

47

 Commonality is satisfied.

c) Typicality

Rule 23(a)(3) requires that “the claims or defenses of the representative parties 

are typical of the claims or defenses of the class.”48 “The test of typicality is that the 

legal and factual position of the class representative must not be markedly different 

45 Krapf, 584 A.2d at 1225 (citations and internal quotation marks omitted).

46 Buttonwood Tree Value P’rs, L.P. v. R. L. Polk & Co., 2022 WL 2255258, at *6 (Del. 

Ch. June 23, 2022) (internal quotation marks omitted) (quoting In re Phila. Stock Exch., 

Inc., 945 A.2d 1123, 1141 (Del. 2008)).

47 Op. Compl. ¶ 156; Non-Op. Compl. ¶ 102.

48 Ct. Ch. R. 23(a)(3).
15

from that of the members of the class” and “focuses on whether the class 

representative claim (or defense) fairly presents the issues on behalf of the 

represented class.”49“Factual differences between the claims of the named plaintiffs 

and the other class members do not necessarily preclude typicality.”50 

Plaintiffs, as common stockholders, are similarly situated to the other 

unaffiliated holders of common stock and their claims “arise[] from the same event 

or course of conduct that gives rise to the claims . . . of other class members and 

[are] based on the same legal theory.”51 That objectors proposed additional legal 

theories for claims Plaintiffs did not raise does not mean that Plaintiffs’ claims are 

atypical.52 Plaintiffs’ claims are typical of those of the class. 

d) Fair And Adequate Representation

Under Rule 23(a)(4), I must determine that the proposed plaintiff class 

representatives and their counsel “will fairly and adequately protect the interests of 

49 Krapf, 584 A.2d at 1225–26 (citations and internal quotation marks omitted).

50 Sheftelman v. Jones, 667 F. Supp. 859, 863 (N.D. Ga. 1987) (citation omitted). “Judicial 

interpretation of the Federal Rules respecting class actions . . . [is] persuasive authority for 

the interpretation of Court of Chancery Rule 23.” Buttonwood, 2022 WL 2255258, at *3 

(internal quotation marks omitted) (quoting Countrywide, 2009 WL 846019, at *12 n.84). 

51 Krapf, 584 A.2d at 1226 (citation omitted).

52 Cf. Angelastro v. Prudential-Bache Sec., Inc., 113 F.R.D. 579, 582 (D.N.J. 1986) (“This 

is not to say, as we discuss in greater detail below, that plaintiff’s claim is identical with 

that of the other putative class members. Rather, it simply means that plaintiff’s 

circumstances do not appear to be so unique as to preclude class treatment.”).
16

the class.”53 “Delaware courts have articulated a three-part test to establish the 

adequacy of the class representatives”: (1) “the representative[s’] interests must not 

be ‘antagonistic to the class’”; (2) “the plaintiffs must retain ‘competent and 

experienced counsel to act on behalf of the class’”; and (3) “ the class representatives 

must ‘possess a basic familiarity with the facts and issues involved in the lawsuit.’”

54

 

“[D]etermination of the adequacy of a class representative is an ‘essential

component’ of the settlement approval process.”55 “In an application of the fourth

prerequisite of Rule 23(a), the predominant considerations are due process related:

(i) that there be no conflict between the named party and the other class members;

and (ii) that the named party may be expected to vigorously defend not only

themselves but the proposed class.”

56

 “The adequacy requirement ‘attempts to

53 Ct. Ch. R. 23(a)(4).

54 Buttonwood, 2022 WL 2255258, at *10 (quoting In re Fuqua Indus., Inc. S’holder Litig., 

752 A.2d 126, 127 (Del. Ch. 1999)). In the absence of substantiated argument or evidence 

to the contrary, I find Plaintiffs possess sufficient familiarity with this litigation. See, e.g., 

D.I. 3, Verification of Walter Szymanski in Support of Verified Class Action Complaint

[hereinafter “Allegheny Verif.”], ¶¶ 4–5; D.I. 206, at Affidavit of Walter Szymanski of 

Allegheny County Employees Retirement System in Support of Proposed Settlement, 

Application for Attorneys’ Fees and Expenses, and Incentive Award for Plaintiffs

[hereinafter “Allegheny Aff.”], ¶¶ 3–6; 2023-0216, D.I. 1 at Affidavit and Verification of 

Anthony Franchi in Support of Verified Stockholder Class Action Complaint [hereinafter 

“First Franchi Aff.”], ¶¶ 2–3; D.I. 206, at Affidavit of Anthony Franchi in Support of 

Proposed Settlement, Application for Attorneys’ Fees and Expenses, and Incentive Award 

for Plaintiff [hereinafter “Second Franchi Aff.”], ¶¶ 3–5. 

55 In re Infinity Broad. Corp. S’holders Litig., 802 A.2d 285, 291 (Del. 2002) (quoting 

Goodrich v. E.F. Hutton Grp., Inc., 681 A.2d at 1039, 1045 (Del. 1996)).

56 Krapf, 584 A.2d at 1225.
17

ensure that the class representative has proper incentives to advance the interests of

the class,’ and ‘speaks to alignment of interests’ among the named and unnamed

class members.”57“The class representative need not be ‘the best of all 

representatives, but [rather] one who will pursue a resolution of the controversy in 

the interests of the class.’”58 Once prima facie adequacy is established, the burden 

shifts to the nonmovant, i.e. objectors, to disqualify the plaintiff.59

Plaintiffs are adequate to represent the interests of the class. As defined, the 

settlement class includes all stockholders who held shares of AMC common stock 

“at any time between August 3, 2022 through and including the Settlement Class 

Time.”60 “Allegheny is the beneficial owner of shares of AMC Entertainment 

57 Buttonwood, 2022 WL 2255258, at *9 (quoting In re Celera Corp. S’holder Litig., 2012 

WL 1020471, at *14 (Del. Ch. Mar. 23, 2012), aff’d in relevant part, rev’d in part, 59 A.3d 

418 (Del. 2012)).

58 Id. (quoting Price v. Wilm. Tr. Co., 730 A.2d 1236, 1238 (Del. Ch. 1997)).

59 See Van de Walle v. Unimation, Inc., 1983 WL 8949, at *4–5 (Del. Ch. Dec. 6, 1983).

60 D.I. 537 at 4; see also D.I. 165 [hereinafter “Stip.”], ¶ A.1(d) (“‘Class Period’ means the 

period from August 3, 2022 through and including the Settlement Class Time.”); id. ¶ 1(w) 

(“‘Settlement Class’ means a non-opt-out class for settlement purposes only, and pursuant 

to Court of Chancery Rules 23(a), 23(b)(1), and 23(b)(2), consisting of all holders of 

Common Stock during the Class Period . . . .”); D.I. 185, Ex. 1 [hereinafter “Notice”], ¶ 29 

(“The ‘Settlement Class’ means all holders of AMC Common Stock between August 3, 

2022, through and including the Settlement Class Time, whether beneficial or of record, 

including the legal representatives, heirs, successors-in-interest, transferees, and assignees 

of all such foregoing holders, but excluding Defendants. ‘Settlement Class Time’ means 

the record time, expected to be set as of the close of business in accordance with any New 

York Stock Exchange and/or Depository Trust Company requirements or policies, on the 

business day prior to Conversion on which the Reverse Stock Split is effective. Put slightly 

differently, if you owned AMC Common Stock between August 3, 2022, through and 
18

Holdings, Inc. common stock and has held such shares continuously since December 

16, 2015.”61 Franchi is a common stockholder that holds no APE units.

62

 In a sense, 

his holdings make him better suited to represent the claims of the common because 

he does not hold competing APE interests.63 Franchi has previously shown he is 

willing and able to lead a representative action to a recovery.64 Allegheny has also 

served as a lead plaintiff in a class action.65

The Special Master concluded the objectors did not carry their burden to 

disqualify Plaintiffs as adequate class representatives.66 One objector, Izzo, took 

exceptions to that recommendation.

67 Izzo makes two arguments in support of her 

including the time after the Reverse Stock Split is effected, but before the Conversion, you 

are a member of the Settlement Class.”).

61 Allegheny Aff. ¶ 2; Allegheny Verif. ¶ 2 (“[Allegheny] is the beneficial owner of shares 

of AMC Entertainment Holdings, Inc. common stock and has held such shares 

continuously since December 16, 2015, and AMC Preferred Equity Units (‘APEs’) and has 

held such units continuously since August 22, 2022.” (emphasis omitted)); D.I. 521 ¶¶ 2, 

4–5.

62 D.I. 450, at Exhibit 2 to the Corrected Transmittal Affidavit of Thomas Curry in Support 

of Plaintiffs’ Reply in Further Support of Settlement, Award of Attorneys’ Fees and 

Expenses, and Incentive Awards [hereinafter “Izzo Obj.”], at 14 (“Discovery shows that 

he owns only 32 shares of Common stock and no Preferred.” (citing 

Franchi_0000000001)); see also First Franchi Aff. ¶ 1; Second Franchi Aff. ¶ 2.

63 See AMC, --- A.3d ---, 2023 WL 4677722, at *13.

64 E.g., In re Multiplan Corp. S’holders Litig., 2023 WL 2329706 (Del. Ch. Mar. 1, 2023) 

(ORDER); Franchi v. Barabe, 2022 WL 3043899 (Del. Ch. Aug. 1, 2022) (ORDER).

65 E.g., Allegheny Cnty. Emps.’ Ret. Sys. v. Energy Transfer LP, 2020 WL 815136 (E.D. 

Pa. Feb. 19, 2020).

66 D.I. 518 [hereinafter “Rpt.”], at 66–70.

67 Izzo Exc. at 32–35.
19

exceptions. First, Izzo disagrees with the Report’s determination that Prezant v. De 

Angelis68 does not render Plaintiffs inadequate. Izzo relied on that case to argue 

Plaintiffs are inadequate because they seek an outcome—the Proposed Settlement, 

which would permit the Proposals and the Conversion—that many AMC 

stockholders oppose.

69

 

In Prezant, this Court approved a class action settlement of a second-filed 

consolidated Delaware action while a first-filed Illinois action against the same 

defendants remained pending.

70

 The Illinois plaintiffs, some of whom were 

plaintiffs in the Delaware action, had rejected a settlement offer similar to the offer 

Delaware plaintiff De Angelis accepted.71 The trial court approved the settlement in 

spite of “highly suspicious” “deficiencies in the settlement process,” but “did not 

make an explicit determination that De Angelis is an adequate representative of the 

class he purports to represent. Indeed, defendants concede[d] that it can be inferred 

from the Vice Chancellor’s findings that De Angelis is an inadequate representative 

68 636 A.2d 915 (Del. 1994).

69 Rpt. at 67 & n.214 (citing Prezant, 636 A.2d at 918–20, 926).

70 636 A.2d 915.

71 Id. at 918, 924; see also id. at 920 (highlighting the fact that De Angelis’s action “asserted 

only state common law fraud claims, which are not maintainable as a class action in 

Delaware;” the defendants did not seek to stay or dismiss the second-filed Delaware action; 

and the defendants did not challenge class certification as they did in Illinois (citing Gaffin 

v. Teledyne, Inc., 611 A.2d 467 (Del. 1992)).
20

of the class.”72 An objector appealed. Because the trial court failed to determine De 

Angelis’s adequacy as a class representative before approving the proposed 

settlement, the Delaware Supreme Court reversed and remanded.

73

 

Izzo interprets Prezant to hold that if other class members do not “desire” the 

relief sought or achieved, the representative plaintiff cannot be adequate.74 From 

there, Izzo argues that because more AMC common stockholders have spoken up to 

oppose the Settlement than to support it, Plaintiffs’ support of the settlement makes 

them inadequate. Prezant did not speak to any such numbers game: it simply 

remanded for the trial court to make the adequacy determination Rule 23 requires.

75

 

Izzo provides no other authority for the proposition that a representative plaintiff can 

be rendered inadequate simply because the settlement drew a large volume of 

72 Id. at 920, 926 (emphasis in original).

73 Id. at 926.

74 Izzo Exc. at 33; id. (“The Report . . . attempts to cabin Prezant’s instruction to cases in 

which a plaintiff seeks to settle claims brought by a pre-existing litigant in another court. 

But Prezant contains no such limiting principle.” (citing Rpt. at 67 n.214)).

75 Prezant’s holding is clear: “Accordingly, we do not believe that a class action settlement 

can constitutionally bind absent class members without a judicial determination that the 

adequate representation requirement of Rule 23(a)(4) has been satisfied.” 636 A.2d at 924. 

Izzo’s exceptions present a different quotation as Prezant’s “holding,” but the quote is 

drawn from a federal case, and Prezant simply relied on that federal language to explain 

why adequacy determinations are important in class actions. Izzo Exc. at 32 & n.105 (“Izzo 

Obj. at 39 (quoting Prezant v. De Angelis, 636 A.2d 915, 924 (Del. 1994) (emphasis added, 

quotation omitted)).”); id. at 33 & n.107; see Prezant, 636 A.2d at 923; id. at 924 (quoting 

Nat’l Ass’n of Reg’l Med. Programs, Inc. v. Mathews, 551 F.2d 340, 344 (D.C. Cir. 1976)) 

(quoting Dierks v. Thompson, 414 F.2d 453, 456 (1st Cir. 1969))).
21

objections. The volume of objections is not indicative of their merit, and meritless 

objections do not demonstrate a disqualifying conflict.

76

 The Court considers the 

merit of objections in assessing the reasonableness of the settlement terms, which I 

have done below. Izzo’s exception based on Prezant is dismissed.

Izzo’s second exception asserts that “the Report disregards the economic 

antagonism between the ‘unlikely hero[es]’ who saved AMC and the stockholders 

who purport to represent them.”77 As a threshold matter, Izzo takes issue with the 

fact that Franchi did not own AMC stock “‘at the time of the wrongs complained of’

in his Complaint.”78 But under Delaware law, direct claims like Plaintiffs’ run with 

the stock, not the holder.

79

 Under the parties’ definition of “Settlement Class,” since 

76 See, e.g., CME Grp., 2009 WL 1547510, at *5 n.26 (“The existence of material conflicts 

between the class representatives and members of the class would limit the Court’s ability 

to conclude that the class representatives’ efforts have been adequate within the meaning 

of Court of Chancery Rule 23(a)(4). A review of those alleged conflicts is best done within 

the context of assessing the merits of the objections. Because the Court will overrule those 

objections, infra, and conclude that the class representatives and their counsel discharged 

their responsibilities fairly and adequately and without any adverse consequences from 

what the objectors have perceived as potential conflicts, the requirements of Court of 

Chancery Rule 23(a)(4) have been satisfied.”); Youngman v. Tahmoush, 457 A.2d 376, 380 

(Del. Ch. 1983) (“The fact that the plaintiff may have interests which go beyond the 

interests of the class, but are at least co-extensive[] with the class interest, will not defeat 

his serving as a representative of the class. Similarly, purely hypothetical, potential or 

remote conflicts of interests never disable the individual plaintiff.” (citation omitted)); 

Buttonwood, 2022 WL 2255258, at *10 (same).

77 Izzo Exc. at 32 (quoting POB at 11).

78 Id. at 34 (footnote omitted).

79 Cf. AMC, --- A.3d ---, 2023 WL 4677722, at *21 (“Under Delaware law, direct claims 

for violating voting rights associated with stock ownership are appurtenant to the share of 
22

Franchi purchased within the Class Period, he is a class member with standing to 

bring claims on behalf of the class. 

From there, Izzo’s argument is more qualitative. She insists Plaintiffs are 

inadequate because they “are not, and have never been, Apes,”80 referring to the 

colloquial name AMC’s retail common stockholders have given themselves. Izzo 

points out that Allegheny and Franchi own relatively few shares of common stock 

and fewer or no APE units, indicating they sold their APE units.

81

 She argues that 

unlike “[t]he AMC stockholders who bought and held for the long term saved 

AMC—and suffered for it,” Plaintiffs did not.82 

Izzo also argues that Plaintiffs’ previous service as representative plaintiffs 

renders them antagonistic to the interests of the class. Izzo describes Plaintiffs as “a 

stock that carries the voting power; they are not personal rights belonging to the 

stockholder who happens to own the shares.” (citing Activision, 124 A.3d at 1049, and 

Urdan v. WR Cap. P’rs, LLC, 244 A.3d 668, 677 (Del. 2020))). Plaintiffs’ counsel has 

concisely explained why Franchi can assert Plaintiffs’ claims under the Activision

framework. D.I. 537.

80 Izzo Exc. at 34; see also Izzo Obj. at 14 (“Franchi is no Ape[.]”); id. at 15 (“Franchi’s 

tiny, late-purchased position may be atypical of Apes, but it is consistent with his history 

of federal and state court litigation.”); id. at 16 (“Allegheny is a pension fund, not an Ape—

and in fact purports to own fewer Common shares than Ms. Izzo.”); cf. id. at 18 (“Ms. Izzo, 

meanwhile, is an Ape to the core.”).

81 Izzo Exc. at 34–35.

82 Id. at 35; see also Hr’g Tr. 154. While Izzo critiques Plaintiffs’ trading patterns, 

including Allegheny’s sales, her exceptions do not address her own stock sales, which the 

parties raised. Izzo Exc. 34–35; D.I. 485 ¶ 1 (disclosing Izzo owns more APE units than 

common stock because she sold shares of common stock).
23

professional plaintiff and a frequent-flying pension fund” who did not “share[] the 

retail investors’ losses.”83 She also contends the requested incentive awards will 

“ma[k]e [Plaintiffs] (more than) whole in the Settlement,” so they “could not 

represent Class members who would lose out.”84

As the Special Master recommended, Izzo’s complaints are not disqualifying. 

This Court has repeatedly determined that representative plaintiffs who hold small 

numbers of shares “are capable of vigorously prosecuting a case.”85 Delaware courts 

routinely appoint institutional stockholders as lead plaintiffs in representative 

actions, for good reason.

86

 The mere fact that Plaintiffs traded differently than other 

83 Izzo Exc. at 35.

84 Id. at 35 & n.113.

85 In re Ebix, Inc. S’holder Litig., 2018 WL 3570126, at *3 (Del. Ch. July 17, 2018) 

(ORDER) (collecting cases); see also, e.g., Van de Walle, 1983 WL 8949, at *1, *6 

(designating plaintiff who held 15 shares as class representative even though his “method 

of acquiring his shares of stock may leave something to be desired”); Van de Walle v. 

Salomon Bros., Inc., 1997 WL 633288, at *2 (Del Ch. Oct. 2, 1997) (finding that a 

shareholder plaintiff with only 100 shares and $388 in potential losses could adequately 

represent the class); Glosser v. Cellcor, Inc., 1995 WL 106527, at *3 (Del. Ch. 

Mar. 10, 1995) (appointing as class representative a shareholder with 200 shares); Joseph 

v. Shell Oil Co., 1985 WL 21125, at *3 (Del. Ch. Feb. 8, 1985) (holding that “[w]ith 100 

shares at risk [plaintiff] ha[d] sufficient interest in the litigation to ensure that he w[ould] 

zealously protect the rights of [other members of the class]”).

86 E.g., Ebix, 2018 WL 3570126, at *1, *3, *5 (granting class certification and appointing 

class representatives, one of which was Desert States Employers & UFCW Union Pension 

Plan); N.J. Carpenters Pension Fund v. infoGROUP, Inc., 2013 WL 610143, at *1, *5–7

(Del. Ch. Feb. 13, 2013) (finding New Jersey Carpenters Pension Fund an adequate class 

representative and certifying the class); In re Cox Radio, Inc. S’holders Litig, 2010 WL 

1806616, at *1, *8 (Del. Ch. May 6, 2010) (certifying a class with Coral Springs Police 

Pension Fund as one of the co-lead plaintiffs), aff’d, 9 A.3d 475 (Del. 2010); cf. David H. 
24

members of the class does not make their interests in the shares they hold 

antagonistic to those of their fellow stockholders. Plaintiffs suffered the same type 

of harm proportionate to their common stock holdings as every other class member.87 

Izzo has not demonstrated that Plaintiffs’ interests are not aligned with those of the 

class in remedying that harm. As to the incentive awards, those are designed to 

compensate representative plaintiffs for the work, hassle, and exposure that their role 

requires.88 Incentive awards restore representative plaintiffs to the baseline position 

Webber, Private Policing of Mergers and Acquisitions: An Empirical Assessment of 

Institutional Lead Plaintiffs in Transactional Class and Derivative Actions, 38 DEL. J.

CORP. L. 907, 908 (2014) (presenting “evidence that public-pension funds, alone among 

institutional types, statistically significantly correlate with the outcomes of greatest interest 

to shareholders-both an increase in the offer price and lower attorneys’ fees”). 

87 See AMC, --- A.3d ---, 2023 WL 4677722, at *2 (“The factual predicate on which the 

plaintiffs’ claims are based depicts the plight of the common stockholders who have been 

harmed by the issuance and voting power of the preferred units.”); id. at *19 (“Plaintiffs 

have undertaken a fiduciary role only as to the claims asserted enforcing the common 

stock’s rights on behalf of, and remedying the alleged harm suffered by, the class of 

common stockholders.”); Turner v. Bernstein, 768 A.2d 24, 33 (Del. Ch. 2000) (“[T]he 

actions involve a challenge to a single course of conduct by the defendants that affects the 

stockholder class equally in proportion to their ownership interest in the enterprise.”); 

Rosen, 1986 WL 4279, at *3 (“I conclude that plaintiffs are adequate representatives of the 

class of tendering stockholders and merged out stockholders. The unfair dealing, if any, 

affected both groups in substantially the same way and their interests do not appear to be 

antagonistic.”).

88 See, e.g., Raider v. Sunderland, 2006 WL 75310, at *1 n.2 (Del. Ch. Jan. 4, 2006) 

(quoting Ingram v. Coca-Cola Co.[, 200 F.R.D. 685, 694 (N.D. Ga. 2001)] for the principle 

that “[c]ourts routinely approve incentive awards to compensate named plaintiffs for the 

services they provided and the risks they incurred during the course of the class action 

litigation” (internal quotation marks omitted)); In re Dell Techs. Inc. Class V S’holders

Litig., --- A.3d ---, 2023 WL 4864861, at *38 n.38 (Del. Ch. July 31, 2023) (collecting

cases awarding incentive awards to compensate representative plaintiffs for their efforts).
25

of their fellow stockholders. Izzo’s exceptions as to Plaintiffs’ adequacy are 

dismissed.89 

Finally, the Court is satisfied that Plaintiffs’ counsel are competent and 

qualified to prosecute this action. They have ample “experience[] in class and 

corporate litigation.”

90

 Without any substantiated argument to the contrary,91 the 

Court finds the representative Plaintiffs to be adequate class representatives.

89 Izzo has been open about her desire to take over this case as lead plaintiff should the 

Court reject the Proposed Settlement. E.g., Izzo Obj. at 19; Izzo Exc. at 44; D.I. 583 ¶¶ 2, 

5 (quoting AMC, --- A.3d ---, 2023 WL 4677722, at *13). This Court has considered an 

objector’s desire to take over the class as context for their objection to a proposed 

settlement. E.g., Ryan v. Gifford, 2009 WL 18143, at *12 (Del. Ch. Jan. 2, 2009).

90 MAT Five, 980 A.2d at 401; Ebix, 2018 WL 3570126, at *3 (finding counsel 

“experienced of litigation of this type” to be competent for purposes of adequacy).

91 Certain objectors challenge the competency of counsel based on the filing of the motion 

to lift the status quo order, or opposing certain class members’ motions. E.g., D.I. 450, 

Plaintiffs’ Reply in Further Support of Settlement, Award of Attorneys’ Fees and 

Expenses, and Incentive Awards [hereinafter “PRB”], Ex. 3, Form Objection, at 19–21; 

see D.I. 59; D.I. 69. Disagreeing with litigation strategy is insufficient to challenge 

competency of class counsel. See, e.g., Carlton Invs. v. TLC Beatrice Int’l Hldgs., Inc., 

1997 WL 305829, at *20 (Del. Ch. May 30, 1997) (“This settlement process and result, 

although not perfect, is in my opinion an example of a fair and reasonable settlement 

achieved . . . with the assistance of experienced counsel. While reasonable minds might 

differ over any number of decisions (and I would) I conclude that the result as a whole is 

reasonable and the product of independent, informed action of directors acting in good 

faith. Therefore, I will approve the proposed settlement.”); Basile v. Merrill Lynch, Pierce, 

Fenner & Smith, Inc., 105 F.R.D. 506, 509 (S.D. Ohio 1985) (finding class counsel 

competent in spite of the defendant’s attacks on “the strategies of counsel for the named 

plaintiffs”); N.J. Carpenters Health Fund v. Residential Cap., LLC, 272 F.R.D. 160, 164–

65 (S.D.N.Y. 2011) (finding claims as to possible differences between class members on 

legal approach and settlement strategies to be “largely conjectural” and therefore not a basis 

for denying class certification).
26

e) Court Of Chancery Rule 23 Affidavits

Rule 23(aa) requires the lead plaintiff to file an affidavit “stating that the 

person has not received, been promised or offered and will not accept any form of 

compensation, directly or indirectly, for prosecuting or serving as a representative 

party” aside from any damages or other compensation granted by the Court, or 

reimbursement of expenses by their lawyer; Rule 23(e) requires a second such 

affidavit.92 Allegheny and Franchi filed their Rule 23(aa) affidavits on February 20, 

and their Rule 23(e) affidavits on May 4.

93

 

2. Court Of Chancery Rule 23(b)

“Chancery Court Rule 23(b) divides class actions into three categories”: 

subsection (1) “applies to class actions that are necessary to protect the party 

opposing the class or the members of the class from inconsistent adjudications in 

separate actions”; subsection (2) “applies to class actions for class-wide injunctive 

or declaratory relief”; and subsection (3) “applies when common questions of law 

or fact predominate and a class action would be superior to other means of 

adjudication.”

94

 “Class suits are not necessarily mutually exclusive; an action may 

92 Ct. Ch. R. 23(aa); Ct. Ch. R. 23(e).

93 First Franchi Aff. ¶ 4; Second Franchi Aff. ¶ 7; Allegheny Verif. ¶ 6; Allegheny Aff. ¶ 8. 

Szymanski’s affidavit filed February 20 affirms he and Allegheny complied with Rule 

23.1(b). Allegheny Verif. ¶ 6. Rule 23.1(b) is analogous to Rule 23(aa), and I accept this 

representation as in accordance with Rule 23(aa). 

94 Nottingham, 564 A.2d at 1095 (footnotes, citations, and internal quotation marks 

omitted).
27

be certified under more than one subdivision of Rule 23(b) in appropriate 

circumstances.”95 “Delaware courts ‘repeatedly have held that actions challenging 

the propriety of director conduct in carrying out corporate transactions are properly 

certifiable under both subdivisions (b)(1) and (b)(2).’”96 So too here.

a) Court of Chancery Rule 23(b)(1)

Certification under Rule 23(b)(1) is appropriate if: (i) prosecution of separate 

actions by individual class members would risk inconsistent and varying results that 

would impose inconsistent obligations, or (ii) adjudication with respect to one class 

member would be dispositive of the class’s interests. “[A]ctions challenging the 

exercise of corporate fiduciary duties are frequently certified under this rule.”97 “The 

Court [has] held that the requirements of Rule 23(b)(1) are satisfied where the case 

involves ‘one set of actions by defendants creating a uniform type of impact upon 

the class of stockholders.’”98 In Turner v. Bernstein, the Court found class treatment 

appropriate under Rule 23(b)(1) given the “challenge to a single course of conduct 

by the defendants that affects the stockholder class equally in proportion to their 

ownership interest in the enterprise.”99

95 In re Celera Corp. S’holder Litig., 59 A.3d 418, 432 (Del. 2012) (quoting Krapf, 584 

A.2d at 1226).

96 Id. at 432–33 (quoting Cox Radio, 2010 WL 1806616, at *8 (citations omitted)).

97 CME Grp., 2009 WL 1547510, at *5.

98 Buttonwood, 2022 WL 2255258, at *11 (quoting Turner, 768 A.2d at 31). 

99 768 A.2d at 33–34.
28

Here, the class satisfies Rule 23(b)(1). All class members are unaffiliated 

holders of common stock with rights to enforce fiduciary and statutory claims, 

challenging the same course of conduct by the defendants, namely: “creating and 

issuing Preferred Stock and APEs, entering into the Deposit Agreement with 

Computershare, and entering into the various agreements described [in the operative 

complaint] with Antara,” and “permit[ing the APEs] to be voted in connection with 

the pending Proposals.”

100

 Plaintiffs also allege the class has suffered the same 

harm: economic and franchise dilution.101

b) Court of Chancery Rule 23(b)(2)

Rule 23(b)(2) is satisfied if the defendants’ conduct is “generally applicable 

to the class,” making class-wide declaratory or injunctive relief appropriate.

102

“[C]ertification under Rule 23(b)(2) is appropriate when the rights and interests of 

100 See AMC, --- A.3d ---, 2023 WL 4677722, at *19 (“Plaintiffs are AMC common 

stockholders who purport to represent a class of common stockholders in pursuit of direct 

claims belonging to the common stockholders based on rights appurtenant to their shares 

of common stock.” (footnote omitted)); id. at *21 (“The direct fiduciary and statutory 

claims Plaintiffs present are appurtenant to shares of common stock.” (footnote omitted)); 

Op. Compl. ¶ 165 (“Moreover, as alleged above, by creating and issuing Preferred Stock 

and APEs, Defendants have caused and will continue to cause significant dilution and 

economic harm to the Class. Moreover, if the Certificate Proposals carry and the APEs 

convert into shares of Common Stock, the Class will suffer further economic harm and 

dilution.”); Non-Op. Compl. ¶ 106 (“Plaintiff and the Class will be harmed if the Preferred 

Stock is not declared invalid and is permitted to be voted in connection with the pending 

Proposals.”).

101 See, e.g., Op. Compl. ¶¶ 4, 32, 93, 110, 151, 165.

102 Ct. Ch. R. 23(b)(2).
29

the class members are homogeneous.”103 “Certification pursuant to Rule 23(b)(2) is 

warranted where the action concerns the alleged breaches of fiduciary duty by 

corporate directors affecting the stockholder class as a whole and the particular facts 

pertaining to any individual class member will not have any bearing on the 

appropriate remedy.”104 This Court may certify a class under Rule 23(b)(2), even 

though the remedy may be a monetary or a monetary equivalent settlement, if the 

“action was commenced with a focus on injunctive or other equitable relief.”

105

Here, the class also satisfies Rule 23(b)(2). Plaintiffs brought a breach of 

fiduciary duty claim alleging the defendants’ breach harmed the class as a whole.106

And “[a]lthough the remedy achieved” in the settlement is stock consideration, “this 

action was commenced with a firm focus on injunctive relief.”107 

3. Discretionary Opt-Out

“If a class is certified under Rule 23(b)(3), class members have an unqualified 

right to opt out of the class. There is no corresponding mandatory opt-out right for 

103 Celera, 59 A.3d at 433 (citing Nottingham, 564 A.2d at 1095).

104 Ebix, 2018 WL 3570126, at *4 (citing Ct. Ch. R. 23(b)(2), and In re Resorts Int’l 

S’holders Litig., 570 A.2d 259, 269–70 (Del. 1990), and Nottingham, 564 A.2d at 1096–

97)).

105 CME Grp., 2009 WL 1547510, at *5.

106 E.g., Op. Compl. ¶¶ 162–167.

107 CME Grp., 2009 WL 1547510, at *5.
30

classes certified under Rule 23(b)(1) or (b)(2).”

108

 The Delaware Supreme Court 

“ha[s] recognized that circumstances may arise where discretionary opt-out rights 

should be granted, such as where the class representative does not adequately 

represent the interests of particular class members, triggering due process 

concerns.”

109

 “Occasions where courts have granted discretionary opt-out rights 

include: when the claims of an objector seeking to opt out are sufficiently distinct 

from the claims of the class as a whole and an opt out is appropriate to facilitate the 

fair and efficient conduct of the action.”

110 But “[t]he propriety of a director action 

should be adjudicated, if it is to be adjudicated, once with respect to all similarly 

situated shareholders.”111 In such a situation, no opt-out right is warranted.112

As the Special Master observed in her Report, “numerous Objectors have 

asked to opt out of the Settlement, with many not saying much more in the 

Objection.”113 The Report recommended the Court not afford discretionary opt-out 

108 Celera, 59 A.3d at 432 (emphasis added) (citing Ch. Ct. R. 23(c)(2), and Nottingham, 

564 A.2d at 1097–98)).

109 Celera, 59 A.3d at 435 (citing Prezant, 636 A.2d at 924)).

110 Id. at 435 (footnote omitted).

111 In re Mobile Commc’ns Corp. of Am., Inc., Consol. Litig., 1991 WL 1392, at *16 (Del. 

Ch. Jan. 7, 1991).

112 Id. (“The Constitution does not require (cf. Hansberry v. Lee, 311 U.S. 32 (1940)), nor 

do prudential considerations, in my opinion, commend the granting of an opt-out right in 

stockholder actions attacking the propriety of director conduct in connection with a 

corporate merger.”).

113 Rpt. at 71 (footnote omitted).
31

rights to this class because of the nature of the relief sought and the consideration 

received.114 The Report also noted, “Objectors have not cited any controlling law or 

provided any persuasive reason to permit opt outs.”115 

Three putative stockholders directly or indirectly took exception to this 

recommendation.116 Izzo first accuses the Special Master of “misunderstanding” her 

Objection.117 She asserts that absent an opt-out, the Proposed Settlement violates 

the class’s due process rights, and cites In re Celera Corp. to argue that “a settlement 

cannot ‘deny a discretionary opt-out right where the policy favoring global 

settlement [is] outweighed by due process concerns.”118 Celera is inapposite: there, 

“the class representative was ‘barely’ adequate, the objector was a significant 

shareholder prepared independently to prosecute a clearly identified and supportable 

claim for substantial money damages, and the only claims realistically being settled 

at the time of the certification hearing nearly a year after the merger were for money 

damages” where the action began with claims for injunctive relief that settled 

114 Id. at 71–73.

115 Id. at 71; id. at 72 n.234 (“Izzo concludes footnote 125 [of her Objection] by noting her 

belief that permitting opt outs is the better course. [N]either Izzo nor any other Objector 

has proposed a legitimate litigation path forward after the Conversion.”).

116 Izzo Exc. at 35–38; see also D.I. 558 at 21 (requesting the Court let him opt out, but not 

engaging with the Special Master’s recommendation against an opt-out class); D.I. 552 at 

8–10 (focusing on sub-classes).

117 Izzo Exc. at 35.

118 Id. at 36 (quoting Celera, 59 A.3d at 436).
32

without formal court approval.119 Izzo’s due process argument also relies on Prezant

to assert stockholders must be able to opt out to pursue an injunction against the 

Conversion,120 which Plaintiffs permit under the Proposed Settlement. As explained 

above, Izzo misinterprets Prezant. Izzo’s doctrinal exceptions are dismissed.

More broadly, an opt-out right is not feasible. First, the Notice did not provide 

for such opt-out procedures; nor was it required to do so. An opt-out class would 

require another notice with a higher distribution rate before class members could opt

out. Second, for an opt-out right to be meaningful, class members who wanted to 

opt out would have to accurately follow the noticed procedures; stockholder 

procedural compliance has been a challenge in this case.

121 And third, permitting an 

opt-out right would further delay the effective date, which as this opinion explains 

would be detrimental to AMC and the class’s interests in it. 

More fundamentally, as discussed in the Rule 23(b) analysis above, the claims 

and the relief sought are class-wide. If Plaintiffs had prevailed and the Court granted 

119 Celera, 59 A.3d at 436 (footnote omitted).

120 Izzo Exc. at 36.

121 E.g., D.I. 567, Appendix B (listing 354 “Timely Objections Without Proof of 

Ownership”); Rpt. at Appendix C (listing 170 “Untimely Objections”); id. at Appendix E 

(listing 37 “Information Statements”); id. at Appendix F (listing 2,108 “Inquiries”); PRB 

at 8 (“Of the approximately 2,850 purported objectors, almost half—about 1,235—did not 

include any information regarding their holdings. Of objectors including some evidence 

of beneficial ownership (e.g., a brokerage account statement, a screen shot, or an authorized 

statement from a broker), the vast majority did not comply with applicable requirements.”); 

id. at 8 n.9 (“For example, brokerage account screenshots frequently did not include the 

stockholder’s name and/or date(s) of holdings.”).
33

injunctive relief, the entire class would have benefitted from that relief. The 

Proposed Settlement releases those claims and allows the Reverse Split and the 

Conversion to go forward with stock consideration to each member of the class. It 

is impossible to split that bargain by permitting the Reverse Split and the Conversion 

to go forward, while excluding certain class members from the consideration and 

permitting them to maintain their claims against, and requests to enjoin, the Reverse 

Split and the Conversion.122 I decline to certify a discretionary opt-out class. The 

other exceptions on this point are dismissed.

C. Adequacy Of Notice

Rule 23 requires that notice of a proposed settlement be given to stockholders. 

The Court evaluates both the contents of the notice, and its delivery.

1. The Notice’s Contents Were Sufficient.

“An adequate notice describes the settlement, ‘puts stockholders upon notice 

as to the general nature of the subject matter, and warns them that their substantial 

122 See Phila. Stock Exch., 945 A.2d at 1136–37 (“The Objectors argue that their procedural 

due process rights were violated because: (i) they were not afforded a right to opt out of 

the class . . . . The Objectors’ procedural due process argument would have merit if this 

were a class action primarily ‘for money damages or other relief at law’ under Rule 

23(b)(3). Here, however, the primary relief sought in the initial and amended complaints 

was equitable . . . . The relief afforded in the settlement is also primarily equitable . . . . In 

these circumstances, it cannot be fairly argued that the trial court’s declination to grant an 

opt-out right to the class was unconstitutional.” (footnote omitted)).
34

interests are involved.’”

123

“A notice of settlement is sufficient if it ‘contains a 

description of the lawsuit, the consideration for the settlement, the location and time 

of the settlement hearing, and informs class members that additional information can 

be obtained by contacting class counsel.’”

124

 “A notice is ‘not required to eliminate 

all occasion for initiative and diligence on the part of the stockholders.’”

125

 

Together, the Stipulation and the Notice describe the underlying facts related 

to the litigation, the claims Plaintiffs pled, the procedural history of the action, and 

the Proposed Settlement. The Notice also adequately describes the consideration for 

the settlement: it states the Proposed Settlement contemplates consideration of one

share of common stock for every seven and a half shares of common stock owned 

by class members at the Settlement Class Time.126 The Notice provides the location 

and time of the Settlement Hearing.

127 Finally, the Notice informs stockholders who 

to contact for further information: it discloses the contact information of the Register 

in Chancery and Plaintiffs’ counsel.128 I conclude the contents of the Notice are 

adequate.

123 Activision, 124 A.3d at 1061 (quoting Geller v. Tabas, 462 A.2d 1078, 1080 (Del. 

1983)).

124 Id. (quoting Phila. Stock Exch., 945 A.2d at 1135 n.13).

125 Id. (quoting Braun v. Fleming–Hall Tobacco Co., 92 A.2d 302, 309 (Del. 1952)).

126 Notice at 1–2; id. ¶¶ 3, 26–27, 44–45.

127 Id. at 3; id. ¶ 60.

128 Id. ¶¶ 71–74.
35

2. Notice Was Adequately Distributed.

The Notice was also adequately distributed. Notice is to be delivered in such 

a manner as the Court directs: by mail, publication or otherwise.129 “Unlike 

certification under Rule 23(b)(3)—which requires ‘that class members be given 

actual notice . . .’—notice to absent class members . . . [is] at the Court’s discretion 

for a class certified under Rule 23(b)(2).”130

Notice is adequately delivered if it is sent to record holders.

131

 Under 

well-settled Delaware law, non-record holders assume the risk that they may not 

receive notice from their nominee or custodian.132 “There is no requirement to mail 

129 See Ct. Ch. R. 23(e).

130 In re Lawson Software, Inc., 2011 WL 2185613, at *1 (Del. Ch. May 27, 2011) (quoting 

Nottingham, 564 A.2d at 1097–98, and citing Ct. Ch. R. 23(d)(2), and MAT Five, 980 A.2d 

at 401).

131 Activision, 124 A.3d at 1061 (“In my view, the scheduling order could have required 

mailing only to a single list of record holders as of the date of mailing. Notice need only 

be sent to record holders.” (citing Am. Hardware Corp. v. Savage Arms Corp., 136 A.2d 

690, 692 (Del. 1957))).

132 See In re Dole Food Co., Inc., 2017 WL 624843, at *5 (Del. Ch. Feb. 15, 2017)

(interpreting Activision to hold that “for a notice of settlement [to] be legally sufficient, a 

corporation only need mail it to its record holders”); Am. Hardware, 136 A.2d at 692 (“If 

an owner of stock chooses to register his shares in the name of a nominee, he takes the risks 

attendant upon such an arrangement, including the risk that he may not receive notice of 

corporate proceedings.”); Enstar Corp. v. Senouf, 535 A.2d 1351, 1354–55 (Del. 1987) 

(same); Crown EMAK P’rs, LLC v. Kurz, 992 A.2d 377, 394 (Del. 2010) (same); In re 

Madison Square Garden Ent. Corp. S’holders Litig., 2023 WL 3696664, at *1 (Del. Ch. 

May 26, 2023) (same); Activision, 124 A.3d at 1061 (same); In re Protection One, Inc. 

S’holder Litig., C.A. No. 5468-VCS, D.I. 89 at 63 (Del. Ch. Oct. 6, 2010) (TRANSCRIPT) 

(“You are allowed to base a settlement on record holders. That is what we look at. When 

you deal -- when you are a beneficial owner and you deal with a broker, you are at your 

own risk. If you want to get notice of a settlement, you become a record holder.”).
36

a settlement notice to every single class member who ever owned a share of a 

publicly held company.”

133

 The Scheduling Order required AMC to deliver “the 

best notice practicable under the circumstances.”

134

 

Here, notice was adequate under the unique circumstances of this case. AMC 

has millions of human beneficial stockholders all over the world. AMC’s retail base 

has a reputation for their online activity.135 But many of AMC’s human stockholders 

presumably do not monitor their AMC investment online. And the parties sought 

notice on a compressed timeline designed to permit AMC to access vital capital if 

the settlement was approved.

136

 

The Company distributed notice electronically and by publication: on AMC’s 

investor relations website, on AMC’s Twitter account, via a Form 8-K, over PR 

Newswire, and on Depository Trust Company’s Legal Notice System.

137

 In most 

133 Activision, 124 A.3d at 1060 (citation omitted).

134 See D.I. 185, Scheduling Order, ¶ 11.

135 E.g., D.I. 206, Plaintiffs’ Opening Brief in Support of Settlement, Award of Attorneys’

Fees and Expenses, and Incentive Awards [hereinafter “POB”], at 11. 

136 D.I. 217 at 18 (“And so I guess the question I’m asking is: Can we truncate it a little 

bit? And obviously we need to work backwards from a hearing date. But from the 

perspective of capital raising, once we get into the late summer, that is typically a quiet 

period. So I’m a little worried about this dragging -- a little -- fairly worried about this 

dragging into the fall.”); id. at 19 (“I do agree with Mr. Neuwirth, there was a desire on the 

company’s part for reasons that, frankly, we are sympathetic to, to be able to do a 

fundraising before the markets basically shut down in August.”).

137 D.I. 530, Affidavit of Publication of Notice for Joshua S. Amsel [hereinafter “Amsel 

Aff.”], ¶ 2; Presentations, AMC THEATRES INVESTOR RELATIONS, 
37

instances, for publicly traded companies with a higher percentage of institutional 

stockholders, this is enough.138 In addition, in this high-profile case, these electronic 

disclosures were amplified in the press and on social media.

139

 

https://investor.amctheatres.com/financial-performance/presentations/default.aspx (last 

visited Aug. 9, 2023); Amsel Aff. ¶ 3; @AMCTheatres, TWITTER (May 6, 2023 10:37 PM), 

https://twitter.com/amctheatres/status/1655039034798874626?s=46&t=WpxdAi8GnKvX2ChMS18bQ; D.I. 531 at Exhibits A - C to Affidavit of Publication of Notice for 

Joshua S. Amsel [hereinafter “Amsel Aff., Ex.”], at Ex. A (same); Amsel Aff. ¶ 4; Amsel 

Aff, Ex. B; AMC Entertainment Holdings, Inc., Current Report (Form 8-K) (May 8, 2023);

see Activision, 124 A.3d at 1061 (“The filing of a copy of the notice as an exhibit to a Form 

8–K provided an additional means for beneficial owners to receive notice.”); Amsel Aff. 

¶ 5; Summary Notice of Pendency of Stockholder Class Action and Proposed Settlement, 

Settlement Hearing, and Right to Appear, PR NEWSWIRE (May 8, 2023 4:58 PM) 

https://www.prnewswire.com/news-releases/summary-notice-of-pendency-ofstockholder-class-action-and-proposed-settlement-settlement-hearing-and-right-toappear-301818710.html; Amsel Aff., Ex. C (same); Mulholland Aff. ¶ 6.

138 See, e.g., Madison Square Garden, 2023 WL 3696664, at *2.

139 E.g., Amsel Aff. ¶ 3; @AMCTheatres, TWITTER (May 6, 2023 10:37 PM), 

https://twitter.com/amctheatres/status/1655039034798874626?s=46&t=WpxdAi8GnKvX2ChMS18bQ; Amsel Aff., Ex. A (same); Mike Murphy, AMC says it’s reached deal 

to settle shareholder lawsuit over APE conversion, MARKETWATCH (May 8, 2023 7:39 

AM), https://www.marketwatch.com/story/amc-says-its-reached-deal-to-settleshareholder-lawsuit-over-ape-conversion-4627a08c (last visited Aug. 9, 2023); Jayson 

Aycock, AMC Entertainment filing sets up end of June to resolve APE conversion lawsuit, 

SEEKING ALPHA (May 8, 2023 5:30 PM), https://seekingalpha.com/news/3967626-amcentertainment-filing-sets-up-end-of-june-to-resolve-ape-conversion-lawsuit (last visited 

Aug. 9, 2023) (“AMC Entertainment (NYSE:AMC) formally filed its notice to 

stockholders about its settlement to resolve class action litigation, linked to the company’s 

plan to raise equity by converting preferred units and implementing a reverse stock split. 

The company’s notice, filed with the SEC, locks down timelines and procedures for AMC 

shareholders to formally object or support a settlement of the action, and sets up a next 

catalyst by way of a June 29–30 hearing at the Delaware Court of Chancery.”); AMC: Now 

We Can AMC Some of WTF is Going On, THE CHANCERY DAILY (May 18, 2023), 

https://thechancerydaily.substack.com/p/amc-now-we-can-amc-some-of-wtf-is (last 

visited Aug. 9, 2023) (“The AMC settlement was noticed to stockholders at the beginning 

of May after a bit of a bumpy start.”); cf. Allison Frankel, AMC meme investors win rare 
38

To reach human stockholders who may not be monitoring their investment or 

financial or legal news online, the Court also directed the Company to promptly 

cause postcard notices to be mailed. At AMC’s direction, notice administrator 

Strategic Claims Services (“SCS”) “mailed . . . post card notice to 16,382 record 

holders identified in transfer records that were provided to SCS on May 1, 2023 by 

Weil, Gotshal & Manges LLP, counsel to AMC.”140 “The mailing of the post card 

to record holders of AMC Common Stock was completed on May 8, 2023.”141 SCS 

also “mailed or emailed approximately 2.8 million post card notices to beneficial 

holders of AMC Common Stock.”142 This is the majority of the 3.8 million 

stockholders the defendants’ counsel represented owned common stock.143 

Postcard notice was far from perfect. The notice administrator failed to mail, 

or facilitate mailing of, notice to approximately a million beneficial owners.144 One 

access to evidence in fight over $129 mln settlement, REUTERS (May 22, 2023 6:14 PM), 

https://www.reuters.com/legal/government/amc-meme-investors-win-rare-accessevidence-fight-over-129-mln-settlement-2023-05-22/ (last visited Aug. 9, 2023).

140 Mulholland Aff. ¶ 4.

141 Id. ¶ 4.

142 Id. ¶ 7; Bravata Aff. ¶ 4.

143 D.I. 217 at 32 (“By our estimation, the number of beneficial stockholders is 

approximately 3.8 million. Obviously, this is a stock that’s held very widely.”); id. at 35 

(“[W]e’ve got almost 4 million stockholders that we would have to mail to . . . .”); see also 

PRB at 8, 37, 51 (referencing AMC’s estimated 3.8 million stockholders).

144 Compare supra note 143 (representing to the Court that there were approximately 3.8 

million AMC common stockholders), with Mulholland Aff. ¶ 7 (“Prior to May 31, 2023, 

SCS and nominees for beneficial holders of AMC Common Stock mailed or emailed 
39

broker was significantly delayed in mailing postcards to another 1.5 million

beneficial holders.

145

 The postcard sent recipients to a nonfunctioning URL that did

not direct to the correct website.

146 Future settling parties should not use this case 

approximately 2.8 million post card notices to beneficial holders of AMC Common 

Stock.”); Bravata Aff. ¶ 4 (“As of June 22, 2023, SCS and nominees for beneficial holders 

of AMC Common Stock mailed or emailed approximately three million post card notices 

to beneficial holders of AMC Common Stock.”); see also D.I. 553 ¶ 6 (noting the 1 million 

discrepancy between 3.8 million stockholders and 2.8 million postcards); D.I. 554 ¶ 1 

(same); D.I. 560 at 1–2 (same). But compare D.I. 565 at 4 (“I am a Canadian and I did not 

receive a postcard to date. I messaged Interactive Brokers Canada and they messaged back 

that they do not mail out postcards. They sent me a link to the court case.” (emphasis 

omitted)), with Mulholland Aff., Ex. C (listing Interactive Brokers Canada Inc. as a 

nominee to which SCS mailed a notice letter requesting assistance identifying AMC 

stockholders and beneficial holders), and Mulholland Aff., Ex. D (listing brokers who 

responded to SCS with beneficial holders’ contact information so that SCS could mail the 

postcards, or an indication that the broker would mail the postcards to the beneficial 

holders, or a response that there were “no holders;” not identifying Interactive Brokers 

Canada Inc. as having responded to SCS); Bravata Aff., Ex. A (same). 

145 Compare Mulholland Aff., Ex. D (reflecting that Robinhood has the names and 

addresses of 1,560,828 beneficial holders), and Bravata Aff., Ex. A (same), and

Mulholland Aff., at Ex. E (reflecting SCS mailed Robinhood letters on May 3 and May 16, 

emailed Robinhood on May 16, 17, and 18, and called Robinhood on May 17), and Bravata 

Aff., Ex. B (same), with D.I. 175 at 5 (writing the parties that the schedule that was 

ultimately reflected in the Scheduling Order “depends on prompt initiation of postcard 

notice, and will only work if postcards will generally be delivered by May 24, 2023”); see 

also Izzo Exc. at 6–7.

146 Compare Mulholland Aff., Ex. A (“You can file a written statement in support of, or 

objection to, the Settlement that is required to be received no later than May 31, 2023, in 

accordance with the instructions set forth in the Notice and the letter that the Court 

published to AMC stockholders, which will be posted on the “Investor Relations” section 

of AMC’s website, investor.amctheatres.com/newsroom/default.aspx”), with 

Presentations, AMC THEATRES INVESTOR RELATIONS, 

https://investor.amctheatres.com/financial-performance/presentations/default.aspx (last 

visited Aug. 9, 2023) (the website where AMC posted relevant documents); accord D.I. 

554 ¶ 1 (“For those who received the postcard after [May 24th], mostly around May 31st, 

the contents were highly confusing, difficult to locate, and intentionally misleading. The 

postcard directed shareholders AMC Theaters’ generic ‘newsroom’ page on the [investor 
40

as a model for distributing postcard notice.

Still, on the unique facts of this case, I conclude notice was adequate. 

Electronic notice was comprehensive. The postcards were intended to provide 

supplemental notice to retail owners who might miss the comprehensive electronic 

notice. Record holders received their postcards in time; beneficial owners are not 

entitled to actual notice. That some postcards were not timely delivered to beneficial 

owners does not mean that notice overall was so inadequate as to deny, or require 

renoticing of, the settlement. And while the URL in the postcard was inaccurate, the 

postcard gave notice of the fact of the Proposed Settlement; a quick internet search 

would lead stockholders to the pervasive electronic notice of the Proposed 

Settlement.147

The stockholder response to the Proposed Settlement is evidence that notice 

was adequate. Many of the putative stockholder Objections, and exceptions,

complained that stockholders had not received a postcard notice.

148

 These 

relations] website instead of ‘financial-performance/presentations’ and several lead 

counsel websites, rather than providing a clear landing page and clear email address . . . as 

requested.”).

147 Activision, 124 A.3d at 1061 (quoting Braun, 92 A.2d at 309).

148 Rpt. at 76; see also D.I. 553 ¶ 6; D.I. 554 ¶ 1; Izzo Exc. at 7–8; D.I. 565 at 4; D.I. 506 

at 1; D.I. 603, Ex. A ¶¶ 1–2.

One stockholder, Anthony Kramer, asserted on June 20 that he had not received the 

postcard notice or any notice of the Proposed Settlement and the May 31 Objection 

deadline until June 2. D.I. 506 at 1. He did not submit an affidavit to this effect until July 

31, over a month after the record had closed. D.I. 603, Ex. A ¶¶ 1–3. In any event, Kramer 
41

Objections actually demonstrate that those stockholders had notice of the Proposed 

Settlement, and of where, when, and how to submit an Objection to the Proposed 

Settlement. 

The notice afforded due process. The stockholder communications to 

Plaintiffs’ counsel and the Court, unprecedented in their scale, were variations on a 

set of themes. The Special Master and I have considered those themes. At the risk 

of minimizing the concern, ingenuity, and savvy of those who did not receive timely 

actual notice and who would have otherwise objected, the scale of the stockholder 

response makes it unlikely that additional actual postcard notice would have 

presented a dispositive issue with the Proposed Settlement that was not already 

identified by the Court, the parties, or any of the thousands of stockholders who 

weighed in, including Izzo and her counsel.

For the foregoing reasons, notice was adequate and the exceptions to the 

Special Master’s conclusion that notice was adequate are dismissed.

D. The Settlement Is Reasonable.

I now turn to consider whether the terms of the Proposed Settlement are 

reasonable, recognizing that “[t]his Court generally favors settlement of complicated 

effectively joined Izzo’s Objection and identifies no manner in which his interests were not 

protected. D.I. 506 (filing a “Joinder of Anthony Kramer in Rose Izzo’s Objection to the 

Proposed Settlement, Award of Attorneys’ Fees and Expenses, and Incentive Awards”).
42

litigation.”149 The Court undertakes this task to protect the interests of the absent 

class members vis-a-vis the personal interests of the representative plaintiff and the 

plaintiff’s counsel. Care must be taken in approving a class action settlement 

company to ensure the fiduciary nature of the action is respected, and that approval 

is consistent with due process; the Court is to guard against the risk that “absent class 

members and others with a stake in the litigation could have their claims released 

without an opportunity to be heard.”

150

The Court’s role is to act as a fiduciary, applying a range-of-reasonableness 

review that is one step removed from the litigant’s business judgment to accept the 

settlement.151 This Court put it simply in Kahn v. Sullivan: “the Court’s role in 

reviewing the proposed Settlement . . . is quite restricted.”152 The Delaware Supreme 

Court went on in that case to explain the Court was to “balance the policy preference 

for settlement against the need to insure that the interests of the shareholders, as a 

class, had been fairly represented.”153 In sum: the role of judicial review is not to 

second-guess or optimize every element of the settlement; rather, the Court’s role as 

149 Gatz, 2009 WL 1743760, at *2.

150 Celera, 59 A.3d at 433–34 (quoting Edward P. Welch et al., Mergers & Acquisitions 

Deal Litigation Under Delaware Corporation Law § 11.01 (2012)).

151 Activision, 124 A.3d at 1064 (quoting Forsythe v. ESC Fund Mgmt. Co. (U.S.), 2013 

WL 458373, at *2 (Del. Ch. Feb. 6, 2013)).

152 594 A.2d 48, 58 n.23 (Del. 1991).

153 Id. at 63 (citing Barkan v. Amsted Indus., Inc., 567 A.2d 1279, 1283 (Del. 989)).
43

a fiduciary is to ensure due process is afforded, and to weigh the “give” against the 

“get” to ensure the class is reaping a reasonable benefit alongside the representative 

plaintiff.

In so doing, the Court’s function is “to consider the nature of the claim, the 

possible defenses thereto, the legal and factual circumstances of the case, and to 

apply its own business judgment in deciding whether the settlement is reasonable in 

light of those factors.”154 The Court must then “determine whether the settlement 

falls within a range of results that a reasonable party in the position of the plaintiff, 

not under any compulsion to settle and with the benefit of the information then 

available, reasonably could accept.”155 “[T]he Court of Chancery need not limit 

itself to an examination of the immediate tangible results to [the class] a corporation 

or its shareholders in determining the fairness of a settlement agreement. The 

probable long-term benefits of the settlement are also properly considered.”156

Courts have framed this reasonableness review as evaluating the “give” and the “get” 

154 Phila. Stock Exch., 945 A.2d at 1137 (quoting Polk, 507 A.2d at 535, and citing Barkan, 

567 A.2d at 1284–85).

155 Activision, 124 A.3d at 1064 (quoting Forsythe, 2013 WL 458373, at *2).

156 Infinity Broad., 802 A.2d at 290 (footnotes omitted) (citing Prince v. Bensinger, 244 

A.2d 89, 95 (Del. Ch. 1968)).
44

of the proposed settlement: the settlement class releases, or “gives” up, claims and, 

in exchange, “gets” consideration.

157

The Stipulation of Settlement, as amended, includes the following release (the 

“Release”):

“Released Plaintiffs’ Claims” means any and all actions, causes of 

action, suits, liabilities, claims, rights of action, debts, sums of money, 

covenants, contracts, controversies, agreements, promises, damages, 

contributions, indemnities, and demands of every nature and 

description, whether or not currently asserted, whether known claims 

or Unknown Claims, suspected, existing, or discoverable, whether 

arising under federal, state, common, or foreign law, and whether based 

on contract, tort, statute, law, equity, or otherwise (including, but not 

limited to, federal and state securities laws), that Plaintiffs or any other 

Settlement Class Member: (i) asserted in the Allegheny Complaint or 

the Munoz Complaint; or (ii) ever had, now have, or hereafter can, shall, 

or may have, directly, representatively, derivatively, or in any other 

capacity that, in full or part, concern, relate to, arise out of, or are in any 

way connected to or based upon the allegations, transactions, facts, 

matters, occurrences, representations, or omissions involved, set forth, 

or referred to in the Complaints and that relate to the ownership of

Common Stock during the Class Period, except claims with regard to 

enforcement of the Settlement and this Stipulation.158

As consideration for the Release, AMC agreed to issue 6,922,565 shares of 

157 See Phila. Stock Exch., 945 A.2d at 1148 n.54 (discussing how the court must “assure” 

the “class members will receive fair consideration for their release of th[eir] claims”); 

Trulia, 129 A.3d at 891 (“In doing so, the Court evaluates not only the claim, possible 

defenses, and obstacles to its successful prosecution, but also ‘the reasonableness of the 

“give” and the “get,”’ or what the class members receive in exchange for ending the 

litigation.” (footnotes omitted)).

158 D.I. 582 at Addendum to Stipulation and Agreement of Compromise, Settlement, and 

Release ¶ 1.
45

common stock (the “Settlement Shares”) to the class members.

159

 Because there is 

no monetary payment to the Company, the Proposed Settlement does not increase 

the size of AMC’s equity pie, but rather gives class members a slightly bigger slice

at the expense of APE unitholders. This is the “get.” 

1. The Class’s “Give”

In exchange for the “get,” the class is releasing certain claims it has against 

the defendants. This is the “give.” In analyzing the class’s “give,” the Court 

examines the strength of the claims and possible claims released in the settlement.160 

Put another way, the Court considers the scope of the release and the value of the 

released claims, taking into account the likelihood a plaintiff could prevail and the 

benefits (monetary or otherwise) of that victory. 

In conducting this analysis, I will assess the value of the claims as noticed, 

pled, and released. I make this unremarkable statement because Plaintiffs have 

handled their claims in unusual and inconsistent ways. The Release includes claims 

asserted in both the operative complaint (referred to as the “Munoz Complaint,” after 

Franchi’s former co-plaintiff) and the Allegheny complaint, as well as claims that 

159 POB at 31.

160 Caremark, 698 A.2d at 961 (“A motion [to approve a proposed settlement] requires the 

court to assess the strengths and weaknesses of the claims asserted in light of the discovery 

record and to evaluate the fairness and adequacy of the consideration offered to the 

corporation in exchange for the release of all claims made or arising from the facts 

alleged.”).
46

are connected to or based upon the allegations in both complaints.161 The released 

claims include the Section 242 claim the Allegheny complaint asserted against 

AMC.

The Release also includes the breach of fiduciary duty claim as pled. 

Plaintiffs’ briefing in support of the Proposed Settlement truncated that claim to 

exclude consideration of events before December 2022.162 The settlement 

161 Allegheny brought a Section 242(b) claim; Franchi did not. See Op. Compl.; Non-Op. 

Compl. ¶¶ 100–107. Plaintiffs designated Franchi’s complaint as the operative complaint, 

but informed the Court in a March 13 letter that “the claim articulated in Count II of the 

Complaint filed in Allegheny County Employees’ Retirement System v. AMC Entertainment 

Holdings, Inc., et al., C.A. No. 2023-0215-MTZ (the ‘Allegheny Action’) will be included 

as a basis for Plaintiffs’ motion for a preliminary injunction in this consolidated action.” 

D.I. 34 at 1–2 (emphasis in original); D.I. 20 ¶ 7 (designating the Franchi complaint the 

operative complaint). At argument, Plaintiffs’ counsel indicated they might not have 

sought an injunction claim based on the Section 242 claim after all. Hr’g Tr. 52 (“I think 

that you may -- Your Honor may or may not have even seen briefing on the Section 242 

claim at the injunction stage. It was there, and there was a letter that says we’re pursuing 

it or have the option to pursue it. And ultimately, I -- I can’t predict what would have 

happened if an injunction brief was filed. But I think I can say there was no guarantee 

there was going to be a statutory argument under 242.”). At the end of the day, the Section 

242 claim is being released, so I must evaluate it in the “give” as against the “get.”

Plaintiffs also contend that “Franchi did not allege that the issuance of the APEs 

was ‘a wrong,’ nor did he assert a §242(b) claim.” PRB at 43. Franchi is a lead plaintiff 

for all claims in this litigation and has negotiated a release for both the breach of fiduciary 

duty claim he pled, and the Section 242(b) claim Allegheny pled. 

162 POB at 39 (“[A]ny claim concerning APEs did not arise until Defendants weaponized 

them alongside the [December 2022] Antara Transaction.”); accord id. at 6 (“Plaintiffs’ 

core claim, concerning the Board inequitably overriding the Common Stock franchise 

through the Antara Transaction, would be governed by the Blasius doctrine.”); id. at 7 (“In 

assessing Plaintiffs’ injunction application, the Court would examine the December 2022 

timeframe to assess the merits of Plaintiffs’ claims.”); PRB at 1 (“Plaintiffs’ Blasius claim 

is prima facie viable, as Defendants’ ‘primary purpose’ for the Antara Transaction was to 

override Common Stock opposition to increasing the number of authorized AMC shares.”).
47

documents make plain that the class is releasing the claim as pled.163 I must evaluate 

the Proposed Settlement based on the claims as pled, not as briefed.164 

In the operative complaint, Plaintiffs alleged:

Defendants breached their fiduciary duties by creating and issuing 

Preferred Stock and APEs, entering into the Deposit Agreement with 

Computershare, and entering into the various agreements described 

herein with Antara, all of which are coercive, will sway the outcome of 

the . . . Proposals, and are designed to circumvent the franchise rights 

of the Class. The Board’s actions are plainly intended to push through 

the . . . Proposals notwithstanding the previous, repeated opposition of 

the Class. 

163 The Notice described the operative complaint as “asserting a claim for breach of 

fiduciary duty in connection with the Proposals and seeking injunctive relief prior to the 

effectuation of the Proposals.” Notice ¶ 14. The Stipulation and Notice define a proposed 

“Settlement Class” to mean “all holders of AMC Common Stock between August 3, 2022, 

through and including the Settlement Class Time,” or record time, “after the Reverse Stock 

Split is effected, but before the Conversion.” Id. ¶ 29; id. ¶ 64(v); see also Stip. ¶ A.1(d) 

(“‘Class Period’ means the period from August 3, 2022 through and including the 

Settlement Class Time.”); id. ¶ 1(w) (“‘Settlement Class’ means a non-opt-out class for 

settlement purposes only, and pursuant to Court of Chancery Rules 23(a), 23(b)(1), and 

23(b)(2), consisting of all holders of Common Stock during the Class Period . . . .”); D.I. 

537 at 4 (“The Settlement Class includes all stockholders who held at any time between 

August 3, 2022 through and including the Class Settlement Time.”); D.I. 537 at 4 

(clarifying that the definition of Settlement Class “includes all stockholders who held [or 

purchased] at any time between August 3, 2022 through and including the Settlement Class 

Time,” as long as they continued to hold at the Settlement Class Time).

164 Parseghian ex rel. Gregory J. Parseghian Revocable Tr. v. Frequency Therapeutics, 

Inc., 2022 WL 2208899, at *9 (Del. Ch. June 21, 2022) (“A Court must examine what has 

been alleged in the pleadings, not what a plaintiff believes has been alleged.” (quoting 

Gabelli & Co., Inc. v. Liggett Grp., Inc., 1983 WL 18015, at *3 (Del. Ch. Mar. 2, 1983), 

aff’d, 479 A.2d 276 (Del. 1984))); id. at *8 n.75 (“Plaintiffs cannot amend their Complaint 

through their brief.” (citing Cal. Pub. Emps. Ret. Sys. v. Coulter, 2002 WL 31888343, at 

*12 (Del. Ch. Dec. 18, 2002))).
48

Moreover, as alleged above, by creating and issuing Preferred Stock 

and APEs, Defendants have caused and will continue to cause 

significant dilution and economic harm to the Class. Moreover, if the 

. . . Proposals carry and the APEs convert into shares of Common Stock, 

the Class will suffer further economic harm and dilution.165

The defendants created and first issued the APEs in July and August 2022, 

respectively.166 They entered the Deposit Agreement with Computershare in August

2022, and the Antara Transaction in December 2022.167 AMC disclosed in 

December 2022 that it would hold a vote on the Proposals.168 In considering the 

value of Plaintiffs’ fiduciary duty claim, I interpret it to include the alleged conduct 

between July and December 2022.

a) The Scope Of The Release

The July 21 Opinion focused on one unsound provision in the Release, and 

concluded the class of common stockholders, as represented by common 

stockholders bringing claims affecting common stockholder rights, could not release 

claims appurtenant to APE units, and that the release of such claims was not 

165 Op. Compl. ¶¶ 164–165 (formatting modified).

166 POB, Ex. 11 at AMC_00005304; DOB, Ex. O, AMC Entertainment Holdings, Inc., 

Registration Statement (Form 8-A) (Aug. 4, 2022) [hereinafter “Aug. 4, 2022 Form 8-A”].

167 DOB, Ex. N, AMC Entertainment Holdings, Inc., Current Report (Form 8K/A) 

(Aug. 4, 2022), Ex. 4.1 [hereinafter “Deposit Agr.”], at Recitals (defining “Depositary” as 

Computershare, Inc. and its affiliate, Computershare Trust Company, N.A.); POB, Ex. 13 

[hereinafter “Dec. 21, 2022 Board Minutes”], at AMC_00005968–70; DOB, Ex. R., AMC 

Entertainment Holdings, Inc., Current Report (Form 8-K) (Dec. 22, 2022) [hereinafter 

“Dec. 22, 2022 Form 8-K”] (announcing entry into Antara Transaction); Dec. 22, 2022 

Form 8-K, Ex. 10.1 (memorializing Antara Transaction).

168 Dec. 22, 2022 Form 8-K.
49

supported by consideration.169 Over Izzo’s Objection and exception, the July 21 

Opinion also concluded the Release did not otherwise improperly release future 

claims.

170

 

On July 22, the parties excised the problematic clause releasing APE 

claims.171 I conclude that the recut Release comports with Delaware law: it is 

supported by consideration, does not release tangential claims, and only releases 

claims based on the identical factual predicate asserted in the complaints.172

b) The Value Of The Released Claims

Plaintiffs brought two claims: one for breach of fiduciary duty asserted in 

both the operative complaint and the Allegheny complaint, and one for a violation 

of 8 Del. C. § 242(b)(2) in the Allegheny complaint. The parties agree the statutory 

claim was weak. They dispute the merits of the breach of fiduciary duty claim, but 

agree the Court was unlikely to issue a preliminary injunction. 

169 AMC, --- A.3d ---, 2023 WL 4677722, at *15–26.

170 Id. at *24 n.186.

171 D.I. 582.

172 AMC, --- A.3d ---, 2023 WL 4677722, at *23 (“A release must be supported by 

consideration to be valid.” (collecting cases)); id. (“In Delaware, the limiting principle is 

that a settlement can release claims that were not specifically asserted in the settled action,

but only if those claims are based on the same identical factual predicate or the same set of 

operative facts as the underlying action.” (quoting Phila. Stock Exch., 945 A.2d at 1146)).
50

i. The Section 242(b) Claim

The parties agree Plaintiffs’ claim under Section 242(b)(2) was meritless.

173

 

That claim alleged that the “creation of the [APEs] . . . adversely affected the 

‘powers, preferences and special rights’ of the Company’s existing Class A common 

stockholders,” and because the defendants “failed to seek approval from common 

stockholders” to issue the APEs, they violated Section 242(b)(2).174 

By default, Section 242(b)(2) requires a class vote when the number of shares 

of that class is increased. But corporate charters can exempt corporations from that 

requirement.175 AMC’s Certificate has such an exemption provision.

176

 

Plaintiffs’ claim rested entirely on more nuanced language in Section 

242(b)(2): “The holders of the outstanding shares of a class shall be entitled to vote 

173 E.g., POB at 8, 35–37; DOB at 23–28.

174 Non-Op. Compl. ¶¶ 101–102.

175 8 Del. C. § 242(b)(2) (“The number of authorized shares of any such class or classes of 

stock may be increased or decreased (but not below the number of shares thereof then 

outstanding) by the affirmative vote of the holders of a majority of the stock of the 

corporation entitled to vote irrespective of this subsection, if so provided in the original 

certificate of incorporation . . . .”).

176 AMC Entertainment Holdings, Inc., Registration Statement (Form S-3) (Dec. 30, 2020), 

Ex. 3.1, Third Amended and Restated Certificate of Incorporation of AMC Entertainment 

Holdings, Inc., at art. IV § D (“The number of authorized shares of any of the Common 

Stock or the Preferred Stock may be increased or decreased (but not below the number of 

shares thereof then outstanding) by the affirmative vote of the holders of a majority in 

voting power of the stock of the Corporation entitled to vote thereon irrespective of the 

provisions of Section 242(b)(2) of the DGCL (or any successor provision thereto), and no 

vote of the holders of any of the Common Stock or the Preferred Stock voting separately 

as a class shall be required therefor.”).
51

as a class upon a proposed amendment, whether or not entitled to vote thereon by 

the certificate of incorporation, if the amendment would . . . alter or change the 

powers, preferences, or special rights of the shares of such class so as to affect them 

adversely.”177 Plaintiffs’ claim relied on the premise that the defendants “alter[ed]

or change[d] the powers, preferences, or special rights of the shares of [common 

stock] so as to affect [the common stock] adversely.”178 

This claim would not have succeeded under current Delaware law. In a 

seminal case colloquially referred to as Dickey Clay, the Delaware Supreme Court 

held that “[w]here the corporate amendment does no more than to increase the 

number of the shares of a preferred or superior class, the relative position of 

subordinated shares is [only] changed in the sense that they are subjected to a greater 

burden,” but “[t]he peculiar, or special, quality with which they are endowed, and 

which serves to distinguish them from shares of another class, remains the same.”

179

 

Similarly, in Orban v. Field, this Court explained, “[t]he language of [Section 

242(b)(2)] makes clear that it affords a right to a class vote when the proposed 

amendment adversely affects the peculiar legal characteristics of that class of 

177 8 Del. C. § 242(b)(2).

178 Id.

179 Hartford Accident & Indem. Co. v. W. S. Dickey Clay Mfg., 24 A.2d 315, 318–19 (Del. 

1942).
52

stock.”

180

 Since “[t]he right to vote is not a peculiar or special characteristic of 

common stock in the capital structure,” the mere “pro-rata dilut[ion]” to the voting 

power of the common stock caused by issued preferred shares with voting rights did 

not implicate Section 242(b)(2).181 This Court recently applied Dickey Clay’s 

holding in In re Snap Inc. Section 242 Litigation.

182

Dickey Clay is dispositive here. Even if the defendants effectuate the 

Proposals, the Proposals do not adversely affect the common stockholders’ rights, 

powers, and preferences requiring a class vote under Section 242(b)(2). Neither did 

the issuance of the APEs themselves. Shares of AMC common stock had, and will 

continue to have, one vote per share: dilution of that vote is not a harm cognizable 

under Section 242(b)(2).

Plaintiffs would not have been able to demonstrate a reasonable probability of 

success at the preliminary injunction stage, or achieve actual success on the merits, 

for their Section 242(b)(2) claim. Releasing this claim has little value.

180 1993 WL 547187, at *7–8 (Del. Ch. Dec. 30, 1993) (emphasis omitted).

181 Id. at *8.

182 In re Snap Inc. Section 242 Litig., Consol. C.A. No. 2022-1032-JTL, D.I. 22 at 33–34 

(Del. Ch. Mar. 29, 2023) (TRANSCRIPT) (“The holding of Dick[ey] Clay is thus that 

relative position in the capital structure is not a right of the shares or, in the language of the 

decision, a quality of the shares such that authorizing more of a senior class or series or 

adding a senior class or series does not make an adverse change to the rights of the junior 

class or series.”), appeal filed No. 120, 2023 (Del. Apr. 12, 2023).
53

ii. The Breach Of Fiduciary Duty Claim 

The parties dispute the merits, and therefore the value, of Plaintiffs’ breach of 

fiduciary duty claim. The dispute centers on the applicable standard of review. 

Delaware law provides three tiers of review for evaluating director decisionmaking: 

the business judgment rule, enhanced scrutiny, and entire fairness.183 If neither 

enhanced scrutiny nor entire fairness is warranted, the Court presumes the directors’ 

actions are in good faith and informed: the result is usually dismissal of the claim.184 

The parties dispute whether the Court has cause to apply enhanced scrutiny to 

the issuance and weaponization of the APE units as affecting the common 

stockholder franchise, or whether that conduct is insulated by the business judgment 

rule. Plaintiffs argue enhanced scrutiny would be warranted under Blasius 

Industries, Inc. v. Atlas Corporation.

185

 The defendants contend the business 

judgment rule would apply, arguing Blasius review is not triggered by interference 

with stockholder voting outside the director election or change of control settings.

186

 

Whether Plaintiffs’ allegations trigger Blasius review was fairly debated 

under Delaware law as it existed at the time of settlement briefing: the scope and 

standard for Blasius review has been the subject of much mastication and 

183 Reis v. Hazelett Strip–Casting Corp., 28 A.3d 442, 457 (Del. Ch. 2011).

184 Id.

185 564 A.2d 651 (Del. Ch. 1988).

186 DOB at 18–22.
54

handwringing over the decades since Blasius was issued.187 The day before the 

Settlement Hearing, the Delaware Supreme Court contributed to that body of law 

with Coster v. UIP Companies, Inc. (“Coster IV”).188 I asked the parties whether 

and how Coster IV should inform my consideration of Plaintiffs’ breach of fiduciary 

duty claim.

189

 

Under my reading of Blasius and the law that followed, including Coster IV, 

the business judgment rule would not have applied to Plaintiffs’ breach of fiduciary 

duty claim. Directorial usurpation of stockholder voting power can inspire enhanced 

scrutiny regardless of the topic of the vote or its effect on corporate control. Case 

187 Mercier v. Inter-Tel (Del.), Inc., 929 A.2d 786, 805 (Del. Ch. 2007) (“[O]ur law has 

struggled to define with certainty the standard of review this court should use to evaluate 

director action affecting the conduct of corporate elections.”); In re MONY Grp., Inc. 

S’holder Litig., 853 A.2d 661, 677–78 (Del. Ch. 2004) (“In MM Companies, Inc. v. Liquid 

Audio, Inc., the Supreme Court recognized that there is a ‘substantial degree of congruence 

between the rationale that led to the Blasius “compelling justification” enhanced standard 

of judicial review and the logical extension of that rationale within the context of the 

Unocal enhanced standard of review.” (emphasis in original) (footnoted omitted) (quoting 

813 A.2d 1118, 1129 (Del. 2003))); id. at 678 (“Cases in which both Blasius and Unocal 

review are implicated involve measures by a board with the primary purpose to preclude 

or, at least, impede the effective exercise of the shareholder franchise and the board’s 

control of the corporation is at play.” (citing Liquid Audio, 813 A.2d at 1131, and Stroud

v. Grace, 606 A.2d 75, 92 n.3 (Del. 1992))); Pell v. Kill, 135 A.3d 764, 785 (Del. Ch. 2016)

(“[T]he Delaware Supreme Court has made clear that Blasius is a form of enhanced 

scrutiny in which the compelling justification concept from that decision is applied ‘within

the . . . enhanced standard of judicial review.’ Writing while serving on this court, Chief 

Justice Strine likewise explained the role of Blasius within the larger context of the 

intermediate standard of enhanced scrutiny.” (emphasis in original) (footnotes omitted)). 

188

--- A.3d ---, 2023 WL 4239581 (Del. June 28, 2023).

189 Hr’g Tr. 225–26, 233, 235–36, 254; D.I. 587 at 6 (citing Coster IV, --- A.3d ---, 2023 

WL 4239581).
55

law blending Blasius with other enhanced scrutiny doctrines does not foreclose 

applying Blasius alone. Delaware law urges restraint in applying Blasius enhanced 

scrutiny alone, but it need not be coupled to another doctrine to have legs. Delaware 

law teaches that Blasius’s original formulation, requiring directors to prove they had 

a compelling justification for thwarting the franchise, is too potent for contexts in 

which the vote does not touch on corporate control. 

This opinion concludes that where a plaintiff establishes directors acted with 

the primary purpose of impeding the exercise of stockholder voting power for a vote 

on issues other than corporate control, in the absence of another basis to apply 

enhanced scrutiny, the directors must demonstrate their actions were reasonable in 

relation to their legitimate objective. Applying that standard to Plaintiffs’ claims, I 

conclude Plaintiffs established the director defendants acted with that 

disenfranchising purpose in issuing the APEs, entering into the Deposit Agreement, 

and entering into the Antara Transaction. In this settlement context, the limited 

record does not convince me that those actions were reasonable: Plaintiffs’ claim 

has value. But the defendants may have been able to prevail, if not on the merits 

then on the equities of a preliminary injunction, by demonstrating the Proposals and 

Conversion were necessary to save AMC from imminent bankruptcy. The value of 

Plaintiffs’ claim is therefore discounted.
56

A. Blasius Enhanced Scrutiny Can Be 

Triggered Outside The Corporate 

Control Context.

“Enhanced scrutiny is Delaware’s intermediate standard of review.”190 

Delaware courts deploy enhanced scrutiny in specific, recurring 

situations marked by two features. First, there is an identifiable 

decision-making context where the realities of the situation “can subtly 

undermine the decisions of even independent and disinterested 

directors.” “Inherent in these situations are subtle structural and 

situational conflicts that do not rise to a level sufficient to trigger entire 

fairness review, but also do not comfortably permit expansive judicial 

deference [under the business judgment rule].” Second, the decision 

under review involves the fiduciary intruding into a space where 

stockholders possess rights of their own. The fiduciary’s exercise of 

corporate power therefore raises questions about the allocation of 

authority within the entity and, from a theoretical perspective, 

implicates the principal-agent problem.191

In other words, enhanced scrutiny is triggered when directors face, or are likely to 

face, conflicts with stockholder interests or stockholder rights, such that the 

presumption that they are conflict-free is set aside. Enhanced scrutiny can be 

triggered by (i) situational conflicts inherent in certain factual circumstances, like a 

potential change of control or cash-out transaction presenting a conflict between 

maximizing stockholder value and directors keeping their seats; or (ii) conflicts 

between directors and stockholders in which the directors act to take stockholders’ 

190 In re Trados Inc. S’holder Litig., 73 A.3d 17, 43 (Del. Ch. 2013).

191 In re Columbia Pipeline Grp., Merger Litig., --- A.3d ---, 2023 WL 4307699, at *50 

(Del. Ch. June 30, 2023) (citations and footnote omitted) (quoting Trados, 73 A.3d at 43, 

and then In re Rural Metro Corp., 88 A.3d 54, 82 (Del. Ch. 2014)).
57

power away from them, like by impinging on their right to tender their shares, vote 

on a merger, or vote in an election.192 

Blasius enhanced scrutiny is triggered by the second type of conflict, when 

directors impinge on stockholders’ right to vote.193 Blasius examined board action 

taken with the primary purpose of preventing stockholders from electing their 

chosen directors.194 The incumbent board was not motivated by selfish 

entrenchment, but rather a desire to slow down an investor’s pursuit of a leveraged 

restructuring and cash distribution that the board thought was not in the company’s 

best interest.195 Even though the board acted in good faith and with due care, 

Chancellor Allen found judicial scrutiny of the board’s action was warranted.196 

He explained that stockholder voting rights are “critical to the theory that 

legitimates” a board’s power over the stockholders’ property.197 “[A] decision by

the board to act for the primary purpose of preventing the effectiveness of a

192 Id. at *50–52.

193 Id. at *52; Blasius, 564 A.2d at 660–61. 

194 564 A.2d at 663.

195 Id. at 658.

196 Id. at 659–62.

197 Id. at 659; accord Liquid Audio, 813 A.2d at 1126 (“Accordingly, while these 

‘fundamental tenets of Delaware corporate law provide for a separation of control and 

ownership,’ the stockholder franchise has been characterized as the ‘ideological 

underpinning’ upon which the legitimacy of the directors[’] managerial power rests.” 

(footnotes omitted)); see also supra note 191, and accompanying text.
58

shareholder vote inevitably involves the question who, as between the principal and

the agent, has authority with respect to a matter of internal corporate governance.”198 

When the board intrudes into or infringes the stockholders’ voting authority, the

board interferes with the allocation of governance power between the board and the

stockholders.199 Chancellor Allen explained:

Action designed principally to interfere with the effectiveness of a vote 

inevitably involves a conflict between the board and a shareholder 

majority. Judicial review of such action involves a determination of the 

legal and equitable obligations of an agent towards his principal. This 

is not, in my opinion, a question that a court may leave to the agent 

finally to decide so long as he does so honestly and competently; that 

is, it may not be left to the agent’s business judgment.200

Accordingly, the Court reviewed the board’s action with enhanced scrutiny, 

and determined the board acted “for the primary purpose of impeding the exercise 

of stockholder voting power.”201 After reasoning such acts were not void per se, the 

Chancellor stated that the challenged actions would stand if the board had a 

“compelling justification for such action[s].”202 On the facts before him, the board 

lacked a compelling justification.203 

198 Blasius, 564 A.2d at 659–60.

199 Id. at 660.

200 Id.

201 Id. at 661.

202 See id.

203 Id. at 663–64.
59

Blasius review was inspired by the very fact of a board’s intent to disrupt the

allocation of power between the board and the stockholders, not because the

directors might otherwise lose theirseats. The conflict warranting enhanced scrutiny

arose within the relationship between the board and the stockholders, rather than

from an external factual situation that might cast doubt on directors’ loyalty. Blasius

explains that an entrenchment motive is not necessary to trigger enhanced scrutiny; 

any attempt by directors to seize power from stockholders presents a conflict that 

vaporizes the protections of the business judgment rule.204 

In the decades that followed Blasius, Delaware law recognized the 

unsurprising fact that director impingement of the franchise frequently occurred in 

the context of director elections or a change of control. Those contexts give rise to 

not only the franchise conflict warranting Blasius review, but also a situational 

conflict on the part of directors wishing to keep their seats.205 Our courts recognized 

that claims that directors impinged the franchise in director elections inspire 

enhanced scrutiny under both Unocal206 and Blasius.

207 Our courts endeavored to 

204 Id. at 652, 659.

205 E.g., Pell, 135 A.3d at 765–76.

206 Unocal Corp. v. Mesa Petroleum Co., 493 A.2d 946 (Del. 1985).

207 Coster IV, --- A.3d ---, 2023 WL 4239581, at *8–11 (discussing Stroud, 606 A.2d 75, 

and Chesapeake Corp. v. Shore, 771 A.2d 293 (Del. Ch. 2000), and Liquid Audio, 813 A.2d 

1118, and Mercier, 929 A.2d 786, and Pell, 135 A.3d 764, and Strategic Inv. Opps. LLC v. 

Lee Enters., 2022 WL 453607 (Del. Ch. Feb. 14, 2022)); Columbia Pipeline, --- A.3d ---, 
60

simplify our law and enumerate one enhanced scrutiny test for such 

circumstances.

208

 They “strove to bring the Blasius and Unocal standards together 

2023 WL 4307699, at *52 (“Recently [in Coster IV], the Delaware Supreme Court said so 

explicitly, holding that Blasius review is just that: a version of the enhanced judicial 

scrutiny first recognized in Unocal. The high court took the additional step of retiring the 

compelling justification concept. Instead, in the context of a corporate election or a 

stockholder vote involving corporate control, the board must identify a legitimate threat 

and then ‘tailor its response to only what is necessary to counter the threat.’ Moreover, the 

board’s response ‘cannot deprive the stockholders of a vote or coerce the stockholder to 

vote a particular way.’ What results is enhanced scrutiny applied with a special sensitivity 

to the stockholder franchise.” (citations omitted)); see also Stroud, 606 A.2d at 92 n.3 

(observing Unocal and Blasius “are not mutually exclusive” in a situation such as “[b]oard 

action interfering with the exercise of the franchise [arising] during a hostile contest for 

control”); Chesapeake, 771 A.2d 293 (applying a modified Unocal review to the board’s 

imposition of a supermajority voting requirement for stockholder-initiated bylaw changes 

in an effort to reduce the voting power of two stockholders in particular); Liquid Audio, 

813 A.2d 1118 (applying a modified Unocal review where the Liquid Audio board 

responded to MM’s takeover efforts by expanding the board from five to seven members 

and filling the new seats, which with a staggered board, defeated MM’s ability to control 

the board following the annual meeting); Mercier, 929 A.2d 786 (applying a modified 

Unocal review where a special committee of independent directors rescheduled a 

stockholder special meeting to consider a proposed merger that would have affected the 

control of the company); Pell, 135 A.3d 764 (applying a modified Unocal review where, 

in advance of its annual meeting and a looming proxy fight, the incumbent board reduced 

from three to one the Class I director seats up for election, ensuring their continued control 

of the company through a three-to-two majority); Strategic Inv. Opps., 2022 WL 453607 

(applying enhanced scrutiny where the board rejected a slate of board nominees for 

noncompliance with the company’s advance notice bylaw); Totta v. CCSB Fin. Corp., 2022 

WL 1751741, at *1, *27–29 (Del. Ch. May 31, 2022) (applying a blended review under 

Mercier and Pell where “the Board expressly instructed the inspector of elections not to 

count a certain number of votes from particular stockholders . . . to interfere with the 

effective exercise of the shareholder franchise in a contested election for directors”), aff’d 

sub nom. CCSB Fin. Corp. v. Totta, --- A.3d ---, 2023 WL 4628822 (Del. July 19, 2023).

208 MONY, 853 A.2d at 678 (citing Liquid Audio, 813 A.2d at 1131, and Stroud, 606 A.2d 

at 92 n.3)); Columbia Pipeline, --- A.3d ---, 2023 WL 4307699, at *52–53 (citations 

omitted). 
61

in a workable manner”209 in order to accomplish “close scrutiny of director action 

that could have the effect of influencing the outcome of corporate director elections 

or other stockholder votes having consequences for corporate control.”210 

I read Coster IV to be the next chapter in that jurisprudence addressing Blasius

and Unocal together in the context of a director election. In considering a stock 

issuance designed to break an election deadlock, the Court of Chancery “found that 

the UIP board had not acted for inequitable purposes and had compelling 

justifications for the dilutive stock issuance” under Schnell and Blasius.

211

 The 

Supreme Court affirmed, and explained that “Blasius first applied that enhanced 

review by requiring a board, even if acting in good faith, to demonstrate a 

‘compelling justification’ for interfering with the stockholder franchise.”

212 But 

“when the board interferes with the stockholder vote during a contest for control,” 

Unocal review is appropriate.213 Coster IV discussed the evolution of joining 

“Unocal’s reasonableness review and Blasius’[s] ‘primary purpose’ and ‘compelling 

justification’ elements into a useful standard of review” when a board infringes on 

209 Mercier, 929 A.2d at 809; see Liquid Audio, 813 A.2d at 1129–31. 

210 Mercier, 929 A.2d at 810.

211 Coster IV, --- A.3d ---, 2023 WL 4239581, at *1, *5 (referring to Schnell v. Chris-Craft 

Indus., Inc., 285 A.2d 437 (Del. 1971)).

212 Id. at *8.

213 Id.
62

the stockholder franchise in matters of corporate control.

214

 “Experience has shown 

that Schnell and Blasius review, as a matter of precedent and practice, have been and 

can be folded into Unocal review to accomplish the same ends—enhanced judicial 

scrutiny of board action that interferes with a corporate election or a stockholder’s 

voting rights in contests for control.”

215

 Coster IV speaks to Blasius review only in 

the context of a contest for control, like the many cases that considered both Blasius 

and Unocal before it.216 

While Blasius review and Unocal review can be inspired by the same facts,

“Blasius does not only apply in cases involving hostile acquirers or directors wishing 

to retain their position against the will of the shareholders.”

217

 “Enhanced scrutiny

. . . is not limited to electoral contests where the entire board might be replaced. 

Enhanced scrutiny also applies in other situations where the law provides 

stockholders with a right to vote and the directors take action that intrudes on the 

214 Id. at *9; id. at *8–11. 

215 Id. at *11 (citing Lawrence A. Hamermesh et al., Optimizing the World’s Leading 

Corporate Law: A Twenty-Year Retrospective and Look Ahead, 77 BUS. LAW. 321, 331 

(2022)).

216 See id. at *12 (“As we explained in our earlier decision in this case, the court’s review 

is situationally specific and is independent of other standards of review.” (footnote 

omitted)).

217 State of Wis. Inv. Bd. v. Peerless Sys. Corp., 2000 WL 1805376, at *13 (Del. Ch. 

Dec. 4, 2000).
63

space allotted for stockholder decision-making.”

218

 Every stockholder vote presents

the opportunity for directors to seize power from stockholders.219 Stockholders 

enjoy the power and right to vote on issues in addition to corporate control. The 

General Assembly has afforded stockholders voting rights on stock increases, stock 

decreases, rights, powers, preferences, and leasing substantially all of the company’s 

assets.220 Delaware law reveres all stockholder voting rights as sacrosanct.221 

Directorial usurpation of stockholders’ power to speak for themselves on issues 

other than corporate control still presents the conflict identified in Blasius.

In State of Wisconsin Investment Board v. Peerless Systems Corporation, 

Chancellor Chandler applied Blasius enhanced scrutiny to board intrusion into the 

218 Pell, 135 A.3d at 786 (Del. Ch. 2016) (quoting Reis, 28 A.3d at 457, and citing Peerless, 

2000 WL 1805376, at *10–11).

219 Peerless, 2000 WL 1805376, at *13 (“The derivation of board power from shareholders, 

as well as the allocation of power with respect to governance of the corporation, are broad 

structural concerns within the corporate form that are present in any shareholder vote.”); 

see Blasius, 564 A.2d at 659–60.

220 See 8 Del. C. § 242(b)(2); 8 Del. C. § 271(a).

221 E.g., EMAK Worldwide, Inc. v. Kurz, 50 A.3d 429, 433 (Del. 2012); Paramount 

Commc’ns, Inc. v. QVC Network, Inc., 637 A.2d 34, 42 (Del. 1994) (“Because of the 

overriding importance of voting rights, this Court and the Court of Chancery have 

consistently acted to protect stockholders from unwarranted interference with such rights.”

(collecting cases)). Indeed, this Court will award fees under the corporate benefit doctrine 

when a litigant preserves the stockholder franchise. See, e.g., EMAK, 50 A.3d at 433 

(“Shareholders have limited opportunities to exercise their right to vote. When plaintiff’s 

counsel obtains a corporate benefit by protecting shareholder voting rights, the benefit’s 

size does not depend on the corporation’s monetary value. The Vice Chancellor correctly 

found that the Kurz and Crown litigation produced a corporate benefit by preserving the 

EMAK shareholders’ voting rights.”).
64

franchise outside the director election context.222 Three proposals were presented 

for a vote at the company’s annual meeting.223 Two proposals passed at the meeting, 

in part because they were routine matters that permitted brokers to vote uninstructed 

shares, and those polls closed.224 The third proposal (“Proposal 2”) was a nonroutine 

proposal to add shares to the stock option plan.225 Proposal 2 required beneficial 

owners to vote their shares, but much of Peerless’s stockholder base comprised 

European investors facing logistical hurdles that frustrated and suppressed their 

votes.226 At the time of the annual meeting, Proposal 2 would have been defeated; 

the plaintiff had solicited against it.227 

The company’s chairman, CEO, and president adjourned the annual meeting, 

thereby postponing the closing of the polls on Proposal 2.228 The defendants “went 

out and tried to gather enough votes to put the [open] proposal over the top”229 from 

selected stockholders “who were more likely to support management and vote in 

favor of Proposal 2,” without informing all the stockholders about the adjournment 

222 2000 WL 1805376.

223 Id. at *3.

224 Id. at *3–4.

225 Id. at *1–2, *4.

226 Id. at *4.

227 Id.

228 Id. at *3.

229 Mercier, 929 A.2d at 811 n.78 (discussing Peerless, 2000 WL 1805376).
65

or the continued solicitation.230 Thirty days later, the company reconvened the 

meeting, the chairman closed the polls, and Proposal 2 passed.231

Peerless began by “reaffirm[ing] the fundamental importance of the voting 

rights of shareholders in Delaware law” and Blasius’s foundation in the allocation 

of power between stockholders and directors.232 Peerless noted that “the concerns 

identified by Chancellor Allen remain fundamental tenets which guide this Court in 

any dispute concerning the shareholder franchise.”233 Peerless stated that “Blasius

does not apply in all cases where a board of directors has interfered with a 

shareholder vote,” and proceeded to consider cases in which director infringement 

of franchise rights had not warranted Blasius scrutiny.234 Those cases failed to 

trigger Blasius scrutiny not because of the type of vote or type of director action, but 

because there was no evidence that the primary purpose was to impede the vote.

235

 

230 Peerless, 2000 WL 1805376, at *5.

231 Id.

232 Id. at *7–8.

233 Id. at *8.

234 Id. at *8–9.

235 Williams v. Geier, 671 A.2d 1368, 1376 (Del. 1996) (noting the absence of evidence to 

support a primary purpose to impede the vote, and that the proxy explained the directors 

were motivated by a desire to promote long-term planning, permit the issuance of 

additional shares, and discourage hostile takeovers); Stroud, 606 A.2d at 95 (holding 

Blasius and Unocal inapplicable in the absence of “unilateral board action intended to 

inequitably manipulate the corporate machinery”); Apple Comput., Inc. v. Exponential 

Tech., Inc., 1999 WL 39547, at *5 (Del. Ch. Jan. 21, 1999) (“In the absence of a hostile 

acquirer or some other motivation for disenfranchising the shareholders, however, a 
66

Peerless applied Blasius’s compelling justification formulation: when the 

primary purpose of a board of directors’ actions is to impede the effective exercise 

of the shareholder franchise, the board must demonstrate a compelling justification 

for such action.

236

 Peerless emphasized these elements are distinct: “The question 

of purpose asks for what ultimate ends were the acts committed. Purpose is defined 

as ‘[a]n objective, goal, or end.’ The concept of justification concerns the rationale 

behind the search for that end. Justification is defined as ‘[a] lawful or sufficient 

reason for one’s acts or omissions.’”

237

On summary judgment, the Court concluded the record demonstrated that “the 

primary purpose behind the adjournment was to ensure the passage of Proposal 2 by 

interfering with the shareholder vote and allowing Proposal 2 to have more time to 

gain votes.”238 Importantly,

board’s unintentional failure to fulfill its supposed § 271 obligations, while perhaps 

constituting a breach of fiduciary duty, does not ordinarily trigger Blasius review.” 

(emphasis added) (citing Williams, 671 A.2d at 1376)).

236 Peerless, 2000 WL 1805376, at *8 (“Blasius sets forth a relatively simple, yet extremely 

powerful, two-part test based on the duty of loyalty. Under that test, first the plaintiff must 

establish that the board acted for the primary purpose of thwarting the exercise of a 

shareholder vote. Second, the board has the burden to demonstrate a compelling 

justification for its actions. Under this second prong, even where the Court finds that the 

action taken by the board was made in good faith, it may still constitute a violation of the 

duty of loyalty.” (footnotes omitted)); Blasius, 564 A.2d at 661. 

237 Peerless, 2000 WL 1805376, at *11 (internal quotation marks and emphasis omitted) 

(quoting Justification, BLACK’S LAW DICTIONARY 870–71 (7th ed. 1999), and Purpose,

BLACK’S LAW DICTIONARY 1250 (7th ed. 1999)).

238 Id.
67

This finding that the primary purpose of the adjournment was to

interfere with the shareholder vote on Proposal 2 in no way indicates 

that the defendants acted in bad faith in calling for the adjournment. 

Even in the worst case scenario, it appears only that the defendants 

misapprehended an admittedly difficult legal principle. In short, I 

assume that the defendants acted in good faith at all times. 

Nevertheless, I may still find that the defendants violated the fiduciary 

duty of loyalty. Blasiusis highly instructive on this point, as Chancellor 

Allen held that “even finding the action taken was in good faith, it 

constituted an unintended violation of the duty of loyalty that the board 

owed to the shareholders.”239

The Court then put the defendants to their heavy burden of demonstrating a 

compelling justification for thwarting a vote on an issue other than corporate 

control.240 

In the years since Peerless, Delaware law has commended restraint in 

applying enhanced scrutiny, particularly under the compelling justification 

formulation, to a franchise conflict on a vote that does not inform corporate 

control.241 The right to vote on directors is the “most important[]” of the 

239 Id. at *12 (quoting Blasius, 564 A.2d at 663).

240 Id. at *12–15 (explaining the Court was not convinced on the plaintiffs’ motion for 

summary judgment that the defendants fell short).

241 Mercier, 929 A.2d at 808 (“[T]he reasoning of Blasius is far less powerful when the 

matter up for consideration has little or no bearing on whether the directors will continue 

in office.”). In considering Peerless specifically, Mercier observed Delaware law afforded 

“more traditional,” less potent tools to address other issues: Schnell, for review of the postadjournment partial solicitation effort; entire fairness, for review of the effect of the CEO’s 

self-interest (as the Peerless defendants requested, see 2000 WL 1805376, at *8); and the 

ability to enjoin board action in the face of “misleading or incomplete disclosures.” 

Mercier, 929 A.2d at 811 n.78 (referring to Schnell). These tools address other reasons to 

set aside the business judgment rule or enjoin director action, namely bad faith, self interest, 
68

stockholders’ rights to vote.242 While even good faith director intrusion into 

stockholder voting power presents an conflict, intrusion into stockholder voting 

power on director elections more plainly smacks of self-interested disloyalty. Cases 

considering the burden to show a compelling justification “display understandable 

discomfort about using such a stringent standard of review in circumstances when a 

stockholder vote has no bearing on issues of corporate control.”243 And Delaware 

law is clear that ministerial board functions affecting the franchise, such as 

“scheduling the meeting and record dates, deciding on a location for the meeting, 

choosing inspectors of elections, or retaining proxy solicitors,” are shielded from 

Blasius enhanced scrutiny in order to ensure an orderly voting process.244

and uninformed voters. Coster v. UIP Cos., Inc. (Coster III), 2022 WL 1299127, at *9 

(Del. Ch. May 2, 2022) (“Heeding the policy determination that Schnell should be deployed 

sparingly, this decision interprets Schnell, when considered in the category of stockholderfranchise challenges, as applicable in the limited scenario wherein the directors have no 

good faith basis for approving the disenfranchising action. That factual finding can be 

made based on evidence that speaks directly to subjective intent. That factual finding also 

can made when objective evidence discredits proffered business reasons for the decision.”), 

aff’d, Coster IV, --- A.3d ---, 2023 WL 4239581.

242 San Antonio Fire & Police Pension Fund v. Bradbury, 2010 WL 4273171, at *7 (Del. 

Ch. Oct. 28, 2010) (“Stockholders exercise their authority over corporate affairs by way of 

ballots. Accordingly, the right to vote on certain matters—most importantly the election 

of directors—is a fundamental power reserved to the stockholders.” (footnote omitted)).

243 Mercier, 929 A.2d at 809 (citing MONY, 853 A.2d at 675 n.51, and Peerless, 2000 WL 

1805376 at *8–9)).

244 MONY, 853 A.2d at 675; accord Mercier, 929 A.2d at 809 (noting that while directors 

cannot “use inequitable means that dupe or dragoon stockholders into consenting,” they 

“can use the legal means at their disposal to pursue stockholder approval,” such as “the 

ability to set and revise meeting dates or to adjourn a convened meeting” (footnote 
69

Still, as Mercier pointed out, the “key issue” warranting Blasius review “is 

whether directors were ultimately preventing stockholders from freely exercising the 

right to vote on a matter committed to them.”245 Even among the cornucopia of other 

doctrines warranting judicial intervention, Blasius review still has a role, and can 

still be triggered, in the context of a vote on matters other than corporate control. 

That our Blasius caselaw has naturally developed in the Unocal setting does not 

preclude Blasius from being prudently applied in other settings. Where a board’s 

nonministerial intrusion into the stockholder franchise generates a conflict between 

the board and the stockholders, even in and especially in the absence of a situational 

conflict, self interest, bad faith, negligence, or disclosure violations, Blasius scrutiny 

remains warranted. 

omitted)); Blasius, 564 A.2d at 663 (“[T]here is a vast difference between expending 

corporate funds to inform the electorate and exercising power for the primary purpose of 

foreclosing effective shareholder action.”).

Blasius disclaimed any need for a plaintiff to show that the fiduciary was selfinterested. See Blasius, 564 A.2d at 652, 658–59. Subsequent authority has made plain 

that Unocal blended with Blasius, or entire fairness, are preferable tools to address 

self-interested behavior, and Schnell addresses bad faith. Mercier, 929 A.2d at 811 n.78; 

Coster III, 2022 WL 1299127, at *9. I accordingly do not limit Blasius as far as MONY

did. See MONY, 853 A.2d at 674 (stating that outside the context of director elections, 

“courts will apply the exacting Blasius standard . . . only in circumstances in which selfinterested or faithless fiduciaries act to deprive stockholders of a full and fair opportunity 

to participate in the matter and to thwart what appears to be the will of a majority of the 

stockholders”).

245 Mercier, 929 A.2d at 809 n.65 (citing Blasius, 564 A.2d at 663).
70

In a case warranting enhanced scrutiny based solely on a franchise conflict 

and not a situational conflict, the formulation of enhanced scrutiny considering the 

reasonableness of board action in view of both franchise and situational conflicts 

together should not be blindly applied.246 That said, concerns about the undue 

potency of Blasiusstemmed from its stringent “compelling justification” standard.247 

Since Peerless, in the more concerning change of control setting, the “compelling 

justification” standard has been defined to mean reasonableness with a “closer fit 

between means and ends” or viewed with a “gimlet eye.”248 Coster IV surveyed that 

246 Mercier, 929 A.2d at 810–11. Pell v. Kill describes Mercier’s three-part blended Unocal

test, requiring “reasonable” fit to a legitimate objective, as governing “director action that 

affects stockholder voting,” and then proceeds to contrast that test with Liquid Audio’s 

requirement that “when the vote involves an election of directors or touches on matters of 

corporate control, the directors’ justification must not only be ‘reasonable’ but also 

‘compelling.’” Pell, 135 A.3d at 787 (citing Liquid Audio, 813 A.2d at 1129–30)). “In 

th[at] context, the shift from ‘reasonable’ to ‘compelling’ requires that the directors 

establish a closer fit between means and ends.” Id. (citing Mercier, 929 A.2d at 819). 

Because the Mercier test was designed for a Unocal setting, I do not read Pell to extend 

that test to all “director action that affects stockholder voting” beyond that setting, to 

wholly replace Blasius. Nor do I believe my conclusion that Blasius alone still operates 

outside the corporate control setting runs afoul of Mercier’s instructions not to extend its 

blended Blasius-Unocal test outside that setting. See Mercier, 929 A.2d at 810–11.

247 Coster IV, --- A.3d ---, 2023 WL 4239581, at *9 (“The Blasius ‘compelling justification’

standard of review turned out to be unworkable in practice. Once the court required a 

compelling justification to justify the board’s action, the outcome was, for the most part, 

preordained.” (collecting authorities)); Mercier, 929 A.2d at 811 n.78 (discussing Peerless: 

“[The Court] determined that the Blasius standard applied, even while acknowledging that 

it was ‘problematic’ to apply the powerful Blasius standard to a stockholder vote in a 

situation that did not involve ‘entrenchment or control issues.’” (citing Peerless, 2000 WL 

1805376, at *12)).

248 Coster IV, --- A.3d ---, 2023 WL 4239581, at *9 (recognizing over the years the Court 

of Chancery has “redefin[ed] what it meant to be compelling” (collecting cases)); see also 
71

authority and “took the additional step of retiring the compelling justification 

concept. . . . in the context of a corporate election or a stockholder vote involving 

corporate control.”249 Outside the director election or corporate control setting, I 

read the weight of authority to call for a reasonableness analysis and to permit the 

“fit” between the means and ends to be looser than in the corporate control setting.

250

In this case, so far as I can see, a Blasius conflict is the only conflict warranting 

enhanced scrutiny of Plaintiffs’ claims, and the only basis for relief. The stockholder 

Coster III, 2022 WL 1299127, at *11 (“The compelling-justification test has been 

described colorfully as calling for the court to view the directors’ explanations with a 

gimlet eye.” (citing Pell, 135 A.3d at 787, and Williams, 671 A.2d at 1376)); Pell, 135 A.3d 

at 787 (“The Delaware Supreme Court has held that when the vote involves an election of 

directors or touches on matters of corporate control, the directors’ justification must not 

only be ‘reasonable’ but also ‘compelling.’ In this context, the shift from ‘reasonable’ to 

‘compelling’ requires that the directors establish a closer fit between means and ends. 

Although linguistically reminiscent of the type of review given to suspect classifications 

under the federal constitution, the use of the word ‘compelling’ is not intended to signal 

that type of strict scrutiny. Instead, it is a reminder for courts to approach directorial 

interventions that affect the stockholder franchise with a ‘gimlet eye.’” (quoting Liquid 

Audio, 813 A.2d at 1129–30, then citing Mercier, 929 A.2d at 819, then quoting 

Chesapeake, 771 A.2d at 323)); Totta, 2022 WL 1751741, *28 (“To satisfy the compellingjustification standard, the directors must show that their actions were reasonable in relation 

to their legitimate objective, and did not preclude the stockholders from exercising their 

right to vote or coerce them into voting a particular way. In this context, the shift from 

reasonable to compelling requires that the directors establish a closer fit between means 

and ends.” (internal quotation marks omitted) (footnotes omitted) (quoting Mercier, 929 

A.2d at 810–11, and then Pell, 135 A.3d at 787)).

249 Columbia Pipeline, 2023 WL 4307699, at *52 (citing Coster IV, --- A.3d ---, 2023 WL 

4239581, at *8, *12).

250 See Columbia Pipeline, 2023 WL 4307699, at *52–53 (surveying tests for enhanced 

scrutiny and summarizing them as “call[ing] for the fiduciaries to establish that they 

(i) acted for a proper purpose and (ii) selected an appropriate means of achieving that 

purpose”).
72

voting rights at stake were not in a contest for control, so Unocal scrutiny is not 

warranted. Plaintiffs have not pled self interest, bad faith, or negligence. The

Court’s other tools for reviewing or enjoining director action are inapposite here. As 

explained, there is no viable Section 242(b)(2) claim. Schnell251 is also a poor fit: 

as in Coster, the evidence does not support a finding of bad faith.252 The board’s 

justification (as distinct from its purpose) was to advance the best interests of AMC 

and save it from financial peril.253 Plaintiffs make rumblings about the adequacy of 

the disclosure of the Deposit Agreement, and the truthfulness of statements 

accompanying the APE issuance that no conversion was intended.254 But those 

disclosure issues are thin reeds to hold the weight of the injunction sought here. And 

the defendants’ actions were nonministerial: they comprised much more than 

scheduling a meeting, moving a record date, or retaining a proxy solicitor.255 Having 

concluded Blasius review is available, I proceed to evaluate Plaintiffs’ call for 

enhanced scrutiny.

251 285 A.2d 437.

252 Coster III, 2022 WL 1299127, at *10; see also Coster IV, --- A.3d ---, 2023 WL 

4239581, at *2.

253 Coster III, 2022 WL 1299127, at *10; see AMC, --- A.3d ---, 2023 WL 4677722, at *6 

(“Without the ability to authorize more shares, AMC could not raise capital by issuing 

more common stock. AMC developed an alternative. . . . AMC and its advisors decided 

that selling preferred stock could raise capital and that the votes associated with the 

preferred stock could carry the Certificate amendment.” (footnotes omitted)).

254 E.g., Op. Compl. ¶¶ 21, 108–110.

255 MONY, 853 A.2d at 674–75.
73

B. Plaintiffs’ Allegations Warrant 

Blasius Enhanced Scrutiny.

Plaintiffs alleged the defendants interfered with the common stockholders’ 

voting on the Proposals at the Special Meeting.256 The Board used its authority under 

the charter to create blank check stock, and its authority to enter into contracts on 

the Company’s behalf to imbue that stock with dispositive voting power.257 Under 

the Deposit Agreement, any uninstructed APE units vote in proportion to the 

instructed APE units.258 The proportional feature enables the APE units to dictate 

the outcome of any vote on which the common shares and the preferred units vote 

together.259 Antara’s promise to vote its APE units received in the Antara 

Transaction in favor of the Proposals, together with the mirrored voting feature, 

ensured the Proposals’ approval by a combined vote of the APE units and common 

stock.

260

256 Op. Compl. ¶¶ 1, 3, 12, 37, 152, 164.

257 POB at 14–18; POB, Ex. 11, at AMC_00005304–5305; POB, Ex. 10, Meeting Materials 

for July 28, 2022 Meeting of the Board of Directors of AMC Entertainment Holdings, Inc., 

at AMC_00005215.

258 Deposit Agr. § 4.5.

259 AMC, --- A.3d ---, 2023 WL 4677722, at *7.

260 Op. Compl. ¶¶ 126, 148–149; Dec. 22, 2022 Form 8-K; Feb. 14, 2023 Proxy at 6 (“On 

the Record Date, Antara Capital LP ([] ‘Antara’) owned and was entitled to vote an

aggregate of 258,439,472 APEs, representing 17.8% of AMC’s issued and outstanding 

shares of Common Stock and APEs (with each APE representing 1/100 of a share of Series 

A Preferred Stock), and plans to vote in favor of the Share Increase Proposal and the 

Reverse Split Proposal, and, if presented, we also anticipate they will also vote in favor of 

the Adjournment Proposal.”); Dec. 21, 2022 Board Minutes at AMC_00005968 (approving 
74

The record before me supports Plaintiffs’ argument that the defendants took 

actions with the primary purpose of overcoming the stockholders’ voting behavior. 

Before they interfered with the franchise, the defendants made other adjustments to 

AMC’s machinery to try to secure their preferred results despite the retail 

stockholders’ antipathy or apathy. Before the defendants created the preferred stock 

that would become the APE units, entered the Deposit Agreement, or entered into 

the Antara Transaction, they faced stockholder opposition to their proposed 

certificate amendment increasing authorized shares of common stock. After once 

withdrawing a proposed amendment due to lack of stockholder approval, the 

defendants amended the Company’s bylaws to lower the quorum requirement from 

a majority to one-third of the issued and outstanding stock entitled to vote at the 

meeting.261 Then, the defendants sought the help of their proxy advisor to suggest 

alternative voting structures that could overcome the lack of “for” votes the 

the Antara Transaction, the AMC Board specifically noted that “AMC had a good chance 

to secure approval” of the Proposals, given that there were more APEs than common shares 

and the APE unitholders would likely want to convert their units to common shares).

261 Op. Compl. ¶¶ 66–67, 71; Non-Op. Compl. ¶ 39; POB, Ex. 7 at AMC_00004343 

(discussing lowering quorum requirement, citing the fact that “nearly 85% of AMC’s stock 

is held by retail investors,” and “obtaining a quorum this year has proven challenging”); 

id. at AMC_00004350 (“WHEREAS, the Corporation’s stockholder base has become more 

diverse with a large number of retail stockholders with small shareholdings making it more 

difficult to obtain the necessary quorum; and WHEREAS, the Board has determined that 

it is in the best interests of the Corporation and its stockholders to reduce the amount of 

stock necessary to constitute a quorum at meetings of stockholders while still ensuring 

meaningful participation by stockholders.” (emphasis omitted)).
75

Company expected.262 The defendants tried again to propose an amendment to 

increase the authorized shares of common stock, and again withdrew this attempt 

when it was clear the electorate was not on board.263 

Out of other ideas, the defendants created the APE units and entered the 

Deposit Agreement. Plaintiffs would likely have been able to establish they did so

with the purpose of rendering the common stockholders’ votes irrelevant via the 

APE units’ proportionate voting structure, and the justification of securing a charter 

amendment authorizing more common stock.

264

 The defendants then guaranteed the 

Proposals would pass despite common stockholder opposition or nonvotes when 

they entered the Antara Transaction, securing Antara’s votes in favor of the 

262 POB, Ex. 20 at AMC_00019707–08 (emailing with AMC’s proxy advisor to structure 

stockholder votes as either “[d]iscretionary voting – where brokers will vote any 

uninstructed shares with management’s recommendations” or “[p]roportionate voting –

where brokers will vote any uninstructed shares in the same proportion that their instructed 

shares were voted” to maintain an “advantage” of favorable votes).

263 Op. Compl. ¶ 74; Non-Op. Compl. ¶¶ 41, 45; AMC Entertainment Holdings, Inc., 

Preliminary Proxy Statement (Schedule 14A), at 11–12 (June 3, 2021); POB at 14 (citing 

POB, Ex. 23, and POB, Ex. 26, and POB, Ex. 30, and POB, Ex. 32); see also AMC, ---

A.3d ---, 2023 WL 4677722, at *4–5 (describing how AMC twice withdrew proposed 

amendments to increase the authorized shares of common stock after it learned they would 

not be approved by the stockholders (footnotes omitted)).

264 See, e.g., Aug. 4, 2022 Form 8-A (“In the absence of specific instructions from holders 

of AMC Preferred Equity Units, the Depositary will vote the Preferred Stock represented 

by the AMC Preferred Equity Units evidenced by the receipts of such holders 

proportionately with votes cast pursuant to instructions received from the other holders of 

AMC Preferred Equity Units.”); Deposit Agr. § 4.5 (providing for proportional voting); 

POB at 19; POB Ex. 20 at AMC_00019707–9708; Op. Compl. ¶ 20.
76

Proposals as compounded by the Deposit Agreement, and said as much in the 

December 21, 2022 Board meeting minutes.265 

The defendants sought to overcome the stockholders’ right to vote “no,” and 

their right not to vote—their “rational apathy.”266 The Board’s actions were similar 

in intention and effect to those in Peerless—it manipulated the corporate machinery 

to rig the Special Meeting vote to overcome common stockholder opposition and the 

defeating presence of nonvotes.267 The creation and issuance of the APE units, 

together with the Deposit Agreement and the Antara Transaction, dictated the 

outcome of stockholder votes on the Proposals. The defendants purposefully diluted

the common stockholders’ votes to the point of meaninglessness.268 Plaintiffs would

265 See Op. Compl. ¶ 149; Dec. 21, 2022 Board Minutes at AMC_00005968 (“Mr. Aron 

outlined the voting dynamics for the special shareholder meeting indicating that there were 

presently considerably more APEs in the float than common stock, . . . and that the nonvoting APE shares would be voted proportionately rather than as ‘no votes’, all of which 

[sic] factors gave AMC a good chance to secure approval for conversion.”).

266 AMC, --- A.3d ---, 2023 WL 4677722, at *5 & n.13.

267 Id. at *10 (“A majority of common stockholders and a majority of the APE unitholders 

did not give any voting instructions at all, let alone in favor of the Proposals.” (footnote 

omitted)); id. at *10 n.67; Peerless, 2000 WL 1805376, at *3–4 (adjourning the annual 

meeting while the polls were still open for non-routine Proposal 2, because the necessary 

beneficial owners did not vote at all).

268 Cf. Phillips v. Insituform of N. Am., Inc., 1987 WL 16285 (Del. Ch. Aug. 27, 1987) 

(concluding that a dilutive stock issuance was designed to thwart the stockholder franchise 

in a vote related to corporate control).
77

likely establish the defendants acted with a primary purpose of thwarting the 

common stockholder franchise.269

This leaves the question of whether the defendants could show their actions 

were reasonable in relation to their legitimate objective. The defendants assert they 

did what they did in 2022 because AMC was in dire financial straits after the 

COVID-19 pandemic, despite the contributions of retail investors. AMC’s net loss 

for 2022 was “just shy of $1 billion,”270 it was burdened by approximately $5.1 

billion of costly debt and had to negotiate extensions of the suspension period for 

various financial payments, and its cash position deteriorated by approximately $961 

million in 2022 despite the sale of APEs that year.271 Unless revenue and attendance 

levels rose, “the failure to obtain additional liquidity through equity capital would 

269 The defendants assert the Proposals and the Conversion were designed to “simplify 

[AMC]’s capital structure” and resolve the disparity between the trading prices of APEs 

and common stock. DOB at 21 (internal quotation marks omitted) (quoting DOB, Ex. S, 

Ex. 99.1 to December 22, 2022 AMC Form 8-K at 2); DOB at 22. That may be: but the 

franchise conflict warranting enhanced scrutiny arises out of the issuance and 

weaponization of the APEs to pass the Proposals. The argument about the design of the 

Proposals and the Conversion goes to the defendants’ justification for thwarting the 

franchise, not whether the defendants’ purpose was to thwart the franchise. See Peerless, 

2000 WL 1805376, at *11. The defendants’ reliance on their justifications does not inform 

the conclusion that their primary purpose was to thwart the franchise. See DOB at 22. 

270 DOB at 5–6 (citing DOB, Ex. C, AMC Entertainment Holdings, Inc., Annual Report 

(Form 10-K) (Feb. 28, 2023) [hereinafter “Feb. 28, 2023 Form 10-K”], at 85); Feb. 28, 

2023 10-K at 86.

271 Id. at 6–7 (citing Feb. 28, 2023 Form 10-K at 23, 87).
78

likely result in bankruptcy.”272 AMC was “[l]eft without any other way to raise 

equity capital.”273 

At least at this stage of the proceedings, the defendants have shown AMC was 

losing money and needed to raise cash in 2022 when the directors guaranteed the 

vote on the Proposals, but not that bankruptcy was imminent. (Indeed, AMC is still 

a going concern.) Perhaps, in April 2023 at the preliminary injunction stage, the 

defendants would have been able to show that in 2022, AMC was in desperate need 

of cash, could only raise it through equity capital, and needed to do so promptly, lest 

AMC declare bankruptcy and all AMC investors lose their investment.

274

 The 

defendants may have been able to show their actions were reasonable in relation to 

that legitimate objective. Plaintiffs’ breach of fiduciary duty claim has merit, and 

therefore value. 

272 Id. at 7–8 (citing Feb. 28, 2023 Form 10-K at 2); Feb. 28, 2023 Form 10-K at 2 (“If we 

are unable to achieve significantly increased levels of attendance and operating revenues, 

we may be required to obtain additional liquidity. If such additional liquidity is not 

obtained or insufficient, we likely would seek an in-court or out-of-court restructuring of 

our liabilities, and in the event of such future liquidation or bankruptcy proceeding, holders 

of our Common Stock, AMC Preferred Equity Units, and other securities would likely 

suffer a total loss of their investment.”).

273 Id. at 9; id. at 2–3, 29.

274 This analysis is distinct from the balance of the equities the Court would conduct in 

April 2023, when considering a preliminary injunction. I address this issue next.
79

c) The Preliminary Injunction

Though Plaintiffs sought injunctive relief, the parties agree that a preliminary 

injunction enjoining the Proposals and the Conversion would have been unlikely. 

“This Court has broad discretion to grant or deny a preliminary injunction.”275 To 

obtain a preliminary injunction, the movant must demonstrate: “(i) a reasonable 

probability of success on the merits; (ii) a threat of irreparable injury if an injunction 

is not granted; and (iii) that the balance of the equities favors the issuance of an 

injunction.”

276

 But a preliminary injunction “is not granted lightly,” and “[t]he 

moving party bears a considerable burden in establishing each of these necessary 

elements.”277

The parties predict the third element, the balance of the equities, would fail.278 

That factor requires the Court to “balance the plaintiff’s need for protection against 

any harm that can reasonably be expected to befall the defendants if the injunction 

275 Fletcher Int’l, Ltd. v. ION Geophysical Corp., 2010 WL 1223782, at *3 (Del. Ch. 

Mar. 24, 2010) (citing Data Gen. Corp. v. Digit. Comput. Controls, Inc., 297 A.2d 437, 

439 (Del. 1972)).

276 Pell, 135 A.3d at 783 (citing Revlon, Inc. v. MacAndrews & Forbes Hldgs., Inc., 506 

A.2d 173, 179 (Del. 1986)).

277 Fletcher Int’l, 2010 WL 1223782, at *3 (alteration in original) (internal quotation marks 

omitted) (quoting La. Mun. Police Empls.’ Ret. Sys. v. Crawford, 918 A.2d 1172, 1185 

(Del. Ch. 2007)).

278 E.g., POB at 37–39; DOB at 28–31.
80

is granted.”279 The Court

must be cautious that its injunctive order does not threaten more harm 

than good. That is, a court in exercising its discretion to issue or deny 

such a . . . remedy must consider all of the foreseeable consequences of 

its order and balance them. It cannot, in equity, risk greater harm to 

defendants, the public or other identified interests, in granting the 

injunction, than it seeks to prevent.280

The parties argued the equities might have balanced against an injunction for 

three reasons. First, that “granting Plaintiffs injunctive relief would have meant 

overriding the will of holders of Common Stock and APEs, who voted 

overwhelmingly in favor” of the Proposals.281 I dispensed with this contention in 

the July 21 Opinion: the instructed votes cast by each class for each proposal were 

not overwhelmingly in favor.282 Second, the parties assumed the Court would be 

279 CBS Corp. v. Nat’l Amusements, Inc., 2018 WL 2263385, at *5 (Del. Ch. May 17, 2018)

(internal quotation marks omitted) (quoting Mills Acq. Co. v. Macmillan, Inc., 559 A.2d 

1261, 1279 (Del. 1989)).

280 Id. (alteration in original) (internal quotation marks omitted) (quoting In re Del Monte 

Foods Co. S’holders Litig., 25 A.3d 813, 839 (Del. Ch. 2011)).

281 DOB at 30.

282 AMC, --- A.3d ---, 2023 WL 4677722, at *10 n.67 (“The defendants continue to 

misrepresent the nature of the vote by including the uninstructed mirrored votes in the total. 

. . . But only 45.80% and 45.39% of outstanding common stockholders and APE 

unitholders together instructed a vote in favor of the Share Increase Proposal and Reverse 

Split Proposal, respectively. . . . This is hardly ‘overwhelming’ or ‘resounding.’”); id. at 

*10 (“A majority of common stockholders and a majority of the APE unitholders did not 

give any voting instructions at all, let alone in favor of the Proposals.”); id. (“[O]nly 

25.54% of the outstanding common voted for the Share Increase Proposal, and 24.80% for 

the Reverse Split Proposal.”).
81

reluctant to invalidate the APEs held by “innocent third parties.”283 I take Plaintiffs’

positions at argument to provide that they sought invalidation of the APE units under 

Section 242, and not under their Blasius claim.

284

 As explained, the Section 242 

claim was meritless, so that injunction would have failed on the merits. 

Finally, the parties contended an April 2023 injunction against the Proposals 

and the Conversion would do great financial harm to AMC, as it would prevent AMC 

from raising capital and paying down its debt. Plaintiffs’ assessment of that harm 

has shifted over time. In February 2023, when Plaintiffs filed their Blasius claim, 

they presumably had a good faith belief that the defendants’ 2022 actions were not 

reasonable in relation to a legitimate objective, namely passing the Proposals to raise 

essential cash for AMC. But in the summer of 2023, when Plaintiffs sought approval 

of their settlement, they argued an April 2023 injunction against the Proposals and 

the Conversion would have been inequitable as those measures were necessary to 

prevent AMC’s demise at that time. I asked Plaintiffs to point the Court to what 

they learned in discovery that led them to change their perception as to whether 

stockholder approval of the Proposals was necessary to keep AMC afloat.285 

Plaintiffs did not identify anything in the record.286

283 POB at 39; see DOB at 30–31.

284 See Hr’g Tr. 48–49, 70, 183.. 

285 Hr’g Tr. 92.

286 Id. at 92–96; id. 96.
82

For their part, the defendants have consistently held the position that the 

Proposals and the Conversion were designed to, and must be effectuated promptly 

to, raise essential cash. As explained above, they provided evidence that in 2022, 

AMC had to either earn revenue or sell equity to raise cash. Once this litigation 

began, the defendants did not oppose Plaintiffs’ motion to expedite, and initially 

advocated for a hearing on any preliminary injunction motion before the stockholder 

vote scheduled for March 14, 2023.287 At that time, their concerns were expressed 

in terms of market uncertainty.288 When the parties negotiated a settlement term 

sheet in early March, the defendants supported the settlement being conditioned on 

lifting the status quo order, enabling AMC to effectuate the Reverse Stock Split and 

Conversion promptly.289 In early May, the defendants began voicing concerns that 

an injunction could “result in a bankruptcy or financial restructuring.”290 During a 

status conference held a few days later, the defendants requested that the Court 

truncate the settlement notice period, explaining that “from the perspective of capital 

raising, once we get into the late summer, that is typically a quiet period,” and that 

287 D.I. 25 at 12 (advocating for a March 10 preliminary injunction hearing date and 

expressing a willingness to “engage in . . . highly expedited discovery”).

288 Id. at 16–17.

289 D.I. 59 at Motion ¶ 23.

290 D.I. 441 at 14.
83

the defendants were “a little worried about” this litigation “dragging into the fall.”291 

The defendants maintained this position through July, expressing that delays in 

effectuating the Reverse Stock Split and Conversion could lead to dilutive equity 

financing or bankruptcy.292

Had the defendants shown that an April preliminary injunction would put 

AMC into bankruptcy, the harm to the nonmovant would have been a very high 

hurdle for Plaintiffs to clear. Perhaps the defendants would have been able to make 

that showing. I conclude a preliminary injunction has a discounted value in 

Plaintiffs’ “give.”

2. The Settlement Class’s “Get”

The Proposed Settlement reallocates AMC’s equity between its common 

stockholders and APE unitholders. If the Proposed Settlement is approved, the 

existing common stockholders will own a slightly bigger slice of the AMC pie at the 

expense of the APE unitholders. The Proposed Settlement thus ameliorates some of 

the dilution the APE issuances inflicted on the common stockholders. Without the 

Proposed Settlement, the existing common stockholders would own approximately 

34.28% of AMC’s equity after the Conversion and the former APEs unitholders 

291 D.I. 217 at 18.

292 D.I. 593 ¶ 14; D.I. 595.
84

would own approximately 65.72%.293 With the Proposed Settlement, the existing 

common stockholders would own approximately 37.15% of AMC’s equity after the 

Conversion and the former APEs unitholders would own approximately 62.85%.294 

This 2.87% increase in ownership is the “get.”

The precise value of that 2.87% at the Settlement Class Time is difficult to 

predict, and the record before me offers little help. Plaintiffs assert that the value of 

the Settlement Shares “exceeds $129 million,” citing an expert affidavit.295 That 

affidavit estimated the value of the settlement consideration based on the Company’s 

market capitalization on April 28 and on May 3, relying on the trading price of APEs 

and common stock on those days.296 The reliance on trading prices means that the 

value of Settlement Shares fluctuates depending on the date used and AMC’s 

circumstances. For example, the affidavit concludes that if valued on April 28, the 

Settlement Shares are worth $124,916,286.34.297 If valued based on the May 3 

trading prices, the value increases to $129,067,486.45.298 But an earlier affidavit, 

293 POB at 30–31; D.I. 206 at Affidavit of Patrick Ripley of Loop Capital Financial 

Consulting Services in Support of Plaintiffs’ Motion to Lift Status Quo Order ¶¶ 3(b), 4(b) 

[hereinafter “Ripley Aff.”].

294 POB at 31; Ripley Aff. ¶¶ 3(c), 4(c).

295 POB at 30 (emphasis omitted) (discussing Ripley Aff.).

296 Ripley Aff. ¶ 2.

297 Id. ¶ 3(c).

298 Id. ¶ 4(c).
85

using the same methodology but March 30 prices, concluded the value was 

$113,986,741.82—$15 million less than Plaintiffs’ May 3 high water mark.299 

Picking between the proposed dates is necessarily arbitrary—AMC’s market 

capitalization on April 28 is no more relevant to the value of the Settlement Shares 

than that of May 3.300 And neither date seems to be a better choice than the date the 

Settlement Shares are issued or a date closer to that issuance. Plaintiffs’ suggestion 

that the May 3 trading prices should be used to value the Settlement Shares lacks 

support. The parties have not supplied me with a way of determining the precise 

value of the settlement consideration. Regardless of the exact value, the historical 

range makes it clear that the Settlement Shares are a significant “get.”

The long-term benefits of the Proposed Settlement to the class may be 

significant if, as the parties seem to agree, the Proposals and Conversion are 

presently key to AMC’s survival even despite recent gains in revenue.

301

 AMC’s 

second quarter Form 10-Q, filed on August 8, 2023, reported that the Company 

299 D.I. 59 at Affidavit ¶ 6(c).

300 The expert sent a native Excel file to the Court and the Special Master, which includes 

additional dates. Plaintiffs have not explained why any particular date should be chosen, 

and the defendants have not stated a position on this issue. The Special Master was 

skeptical of the May 3 valuation date, and proposed instead that “a reasonable approach to 

value the Settlement Shares in Plaintiffs’ analysis is to consider a range, median, or 

average, rather than just a single date in time.” Rpt. at 35–36.

301 See Infinity Broad., 802 A.2d at 290 (stating that the Court may consider the “probable 

long-term benefits of [a] settlement” when assessing whether the settlement is fair to the 

class).
86

experienced an over $225 million net loss from operating activities for the six

months ending June 30, 2023.302 That same Form 10-Q disclosed that AMC has 

about $708 million in current assets.303 These facts may underpin the 10-Q’s

disclosure that “[t]he Company’s current cash burn rates are not sustainable longterm.”304

 And, in AMC’s words, its current assets are “dwarfed by its $11.4 billion 

in total liabilities.”

305

 While the Company stated it believes it has sufficient cash 

and cash equivalents to “fund its operations and satisfy its obligations currently and 

through the next twelve months,” it is unclear how long it can do so because the 

Company’s cash burn rate “is uncertain due to limited ability to predict studio film 

release dates, the overall production and theatrical release levels, and success of 

individual titles.”306

302 AMC Entertainment Holdings, Inc., Quarterly Report (Form 10-Q) at 4 (Aug. 8, 2023) 

[hereinafter “Aug. 8 Form 10-Q”]. The Court takes judicial notice of AMC’s public SEC 

filings. DFC Glob. Corp. v. Muirfield Value P’rs, L.P., 172 A.3d 346, 351 n.7 (Del. 2017).

303 Aug. 8 Form 10-Q at 5.

304 Id. at 8.

305 D.I. 593 ¶ 12.

306 Aug. 8 Form 10-Q at 8. To be sure, the Company generated net earnings of $8.6 million 

for the three months ended June 30, 2023, in contrast to a net loss of $235.5 million in the 

three months ended March 31, 2023. Compare id. at 4, with AMC Entertainment Holdings, 

Inc., Quarterly Report (Form 10-Q) at 4 (May 5, 2023). It appears that this increase was 

driven primarily by “the popularity of film product compared to the prior year” and higher 

food and beverage sales, which was driven at least partially by the increase in admissions. 

Id. at 43. Nevertheless, AMC reported current assets of $ 707.7 million for the three 

months ending June 30, 2023, as compared to the $740.5 it reported for the three months 
87

Against this backdrop, the defendants anticipate the Company will have to 

raise additional capital through equity sales to stave off bankruptcy and remain in 

compliance with its loan covenants.307 If AMC cannot raise enough cash to pay its 

debts and enters bankruptcy, the class members will lose their investment. The 

Proposed Settlement gives the class more equity in a struggling company, and gives

the Company a way to raise needed revenue.

In exchange for this increased slice of ownership in AMC as a going concern, 

the common stockholders would release all claims asserted in or relating to the 

allegations in the Allegheny complaint or the operative complaint “that relate to the 

ownership of Common Stock during the Class Period.”308 As explained, the Section 

242 claim is worthless. The Blasius claim may very well have been defeated on the 

merits by the defendants showing their actions were reasonable in relation to the 

legitimate objective of raising essential capital. Or, if an injunction would have put 

AMC into bankruptcy, the equities might have foreclosed injunctive relief. Even 

ending March 31, 2023. Compare id. at 5, with AMC Entertainment Holdings, Inc., 

Quarterly Report (Form 10-Q) at 5 (May 5, 2023).

Though these results were filed after briefing on the Proposed Settlement was 

complete, they reflect an earnings period that concluded on June 30, 2023. The defendants 

have represented as recently as July 26 that the Company’s financial troubles persist. These 

financial results, alone, do not demonstrate the Company no longer has a need to raise 

equity financing in the short term.

307 D.I. 593 at 13–14.

308 D.I. 582, at Addendum to Stipulation and Agreement of Compromise, Settlement, and 

Release ¶ 1.
88

without a precise valuation of the Settlement Shares, releasing these claims in 

exchange for Settlement Shares and AMC’s continued viability falls within a range 

of results that a reasonable disinterested person could accept.309

E. Plaintiffs’ Lead Counsel Is Granted Fees And Expenses.

This Court may award attorneys’ fees to counsel whose efforts conferred a

common benefit to the class.310 This principle applies to both financial and 

nonmonetary benefits.

311

 The determination of any attorney fee and expense award 

is within the Court’s discretion.312 In setting fee awards, the Court of Chancery 

“must make an independent determination of reasonableness.”313 

When setting a fee award, the Court will generally follow the factors identified 

in the Delaware Supreme Court’s Sugarland decision and relied on by subsequent 

decisions.314 The relevant factors here are: (1) the size of the benefit achieved; (2) 

whether the plaintiffs can rightly receive all the credit for the benefit conferred or 

309 See Forsythe v. ESC Fund Mgmt. Co. (U.S.), 2012 WL 1655538, at *4 (Del. Ch. 

May 9, 2012).

310 See, e.g., Ams. Mining Corp. v. Theriault, 51 A.3d 1213, 1255 (Del. 2012); Tandycrafts, 

Inc. v. Initio P’rs, 562 A.2d 1162, 1164 (Del. 1989).

311 See, e.g., EMAK, 50 A.3d at 434.

312 Ams. Mining, 51 A.3d at 1255; Sugarland Indus., Inc. v. Thomas, 420 A.2d 142, 149–

50 (Del. 1980).

313 Goodrich, 681 A.2d at 1045–46.

314 See, e.g., Sciabacucchi v. Salzberg, 2019 WL 2913272, at *1 (Del. Ch. July 8, 2019) 

(quoting Ams. Mining, 51 A.3d at 1254), judgment vacated on other grounds, 2020 WL 

1985048 (Del. Ch. Apr. 24, 2020).
89

only a portion thereof; (3) the time and effort of counsel; (4) the standing and ability 

of counsel; (5) the relative complexities of the litigation; (6) the stage at which the 

litigation ended; and (7) any contingency factor.315 

The factors are not weighted equally. This Court has consistently noted that 

the most important factors in determining a fee award are the size of the benefit 

achieved, and whether the plaintiff can be credited for the benefit.316 “Secondary 

factors include the complexity of the litigation, the standing and skill of counsel, and 

the contingent nature of the fee arrangement together with the level of contingency 

risk actually involved in the case.”

317

 “Precedent awards from similar cases may be 

considered for the obvious reason that like cases should be treated alike.”

318

 

315 Sugarland, 420 A.2d 142.

316 E.g., In re Plains Res. Inc., 2005 WL 332811, at *3 (Del. Ch. Feb. 4, 2005) (“The factors 

are: . . . (vi) whether the plaintiff can rightly receive all the credit for the benefit conferred 

or only a portion thereof; and (vii) the size of the benefit conferred. The last two elements 

are often considered the most important.” (footnote omitted) (citing Sugarland, 420 A.2d 

at 149–50)); see also Gatz, 2009 WL 1743760, at *3 (“This Court has consistently noted 

that the most important factor in determining a fee award is the size of the benefit 

achieved.”); Franklin Balance Sheet Inv. Fund v. Crowley, 2007 WL 2495018, at *8 (Del. 

Ch. Aug. 30, 2007) (“In determining the size of an award of attorney’s fees, courts assign 

the greatest weight to the benefit achieved by the litigation.” (citing Sugarland, 420 A.2d 

at 150)).

317 Olson v. EV3, Inc., 2011 WL 704409, at *8 (Del. Ch. Feb. 21, 2011) (citing Gatz, 2009 

WL 1743760, at *3). 

318 Id.
90

Applying the Sugarland factors here, I find that they weigh in support of a smaller 

award than Plaintiffs’ counsel suggest.

319

 I address each factor in turn.

1. The Benefits Achieved And Credit For The Benefits 

Conferred

When considering the fee award, the Court looks at the benefit conferred on 

the company and its stockholders, and then awards a percentage of that the benefit’s 

value based on a sliding scale keyed to the litigation’s progress.

320

 Plaintiffs’ counsel 

have asked for a $20 million fee award (inclusive of expenses)321 paid separately, 

which could be between 15% and 27.5%, depending on the value of the benefit.322 

The quantifiable benefit from which the fee is calculated is limited to the Settlement 

Shares. Plaintiffs refer to other “substantial non-monetary benefits” achieved in

connection with the settlement, but they did not make any effort to meaningfully 

describe or value those benefits.323 Plaintiffs are properly credited with the 

Settlement Share benefits that would not have been conferred but for this litigation.

319 The defendants take “no position on the fees.” Hr’g Tr. 197.

320 E.g., Gatz, 2009 WL 1743760, at *3; Dell, --- A.3d ---, 2023 WL 4864861, at *7.

321 POB at viii, 11, 51.

322 Rpt. at 81–82 (illustrating a range of values for the Settlement Shares and what 

percentage a $20 million fee would represent of those values). These percentages are based 

on predicted Settlement Share values between approximately $53 million and 

approximately $113 million. Id. at 82.

323 POB at 59; see also id. at 57 (referring to “other noneconomic benefits of the 

settlement”).
91

The next step is to set the percentage of that benefit counsel earned. While 

the “[o]ther Sugarland factors may cause the court to adjust the . . . fee up or down, 

. . . the starting point under Americas Mining is a percentage calculation. Under this 

method, the ‘common fund is itself the measure of success.’”

324 A mid-stage 

settlement follows “multiple depositions and some level of motion practice.”325 An 

early-stage settlement precedes a mid-stage settlement.326 “A logical point to start 

the late-stage phase is after the end of expert discovery.”

327

 

Delaware law uses different sliding scales depending on whether the fee is 

paid out of the common fund or paid separately (as when the common benefit is 

nonmonetary). “A common fund with a fee award paid separately is mathematically 

equivalent to a larger common fund with a lower percentage fee award coming out 

of the gross amount.”

328

 For example, if a monetary common fund is worth $100 

million, and the plaintiff’s counsel is awarded 15%, then the remaining corporate 

324 Dell, 2023 WL 4864861, at *7 (quoting Ams. Mining, 51 A.3d at 1259).

325 Id. at *8 (internal quotation marks omitted) (quoting Ams. Mining, 51 A.3d at 1259–

60).

326 Id. (quoting Ams. Mining, 51 A.3d at 1259–60).

327 Id. at *11; id. at *9 (“This case involved a late-stage settlement. The parties informed 

the court that they had reached an agreement in principle on November 16, 2022. That was 

nineteen calendar days before trial was scheduled to begin. The parties had submitted a 

fifty-three-page joint pre-trial order and filed their pre-trial briefs. Plaintiff’s counsel filed 

a pre-trial brief that spanned 134 pages and contained 22,908 words. Plaintiff’s counsel 

truly litigated until the eve of trial.”).

328 Id. at *34.
92

benefit allocated to the class is worth $85 million. The class receives the same 

amount from a $117.6 million monetary common fund if 15% is paid to the 

plaintiff’s counsel out of that fund. If a nonmonetary common fund is worth $100 

million, and the plaintiff’s counsel is awarded 15% paid separately, then the benefit 

to the class is still worth $100 million. 

Recently, Dell included the following chart illustrating fee award percentages 

based on when the litigation was settled, and how the fee is structured:329

Contrary to Plaintiffs’ counsel’s position, this matter did not settle “on the eve 

of a preliminary injunction hearing.”330 The parties sent the Court an April 3 letter 

indicating they had reached a term sheet; the preliminary injunction hearing was 

scheduled for April 27. The parties had not taken any depositions or filed their 

preliminary injunction briefs. The only motion the parties had to address before 

reaching their term sheet was a motion to intervene.331 While the settlement 

329 Id. at *34.

330 POB at 59.

331 D.I. 15. Plaintiffs submitted a fifteen-page opposition. D.I. 26. The Court denied the 

motion without argument. D.I. 37.
93

followed highly expedited written and document discovery, the settlement is still an 

early-stage settlement. The most justifiable “paid separately” percentage is 13%.332 

The fee calculation will start from that figure.

2. Secondary Sugarland Factors

“Secondary factors include the complexity of the litigation, the standing and 

skill of counsel, and the contingent nature of the fee arrangement together with the 

level of contingency risk actually involved in the case.”

333

 

“All else equal, litigation that is challenging and complex supports a higher 

fee award.”334 This litigation was both complex and challenging. Plaintiffs filed 

claims applying a novel legal theory, crafted in a changing legal landscape, to 

sophisticated financial engineering.335 Plaintiffs’ counsel also undertook the 

challenging task of engaging with unprecedented putative class participation. They 

absorbed, processed, catalogued, and distributed thousands of putative stockholder 

332 Dell, 2023 WL 4864861, at *34.

333 Judy v. Preferred Commc’n Sys., Inc., 2016 WL 4992687, at *15 (Del. Ch. 

Sept. 19, 2016) (citing Gatz, 2009 WL 1743760, at *3).

334 Activision, 124 A.3d at 1072.

335 During the pendency of this litigation, this Court issued a ruling concerning the scope 

of Section 242 in In re Snap Inc. Section 242 Litigation, the Delaware Supreme Court 

issued Coster IV, and Delaware’s General Assembly passed amendments to Section 242. 

In re Snap, Consol. C.A. No. 2022-1032-JTL, D.I. 22; Coster IV, --- A.3d ---, 2023 WL 

4239581; Del. S.B. 114, 152d Gen. Assem., 84 Del. Laws ch. 98 (2023). 
94

communications. Plaintiffs’ counsel also had to endure the challenges of security 

threats to themselves and their staff. This factor warrants an upward adjustment. 

Counsel may be “entitled to a much larger fee when the compensation is 

contingent than when it is fixed on an hourly or contractual basis.”336 “Fee awards 

should encourage future meritorious lawsuits by compensating the plaintiffs’ 

attorneys for their lost opportunity cost (typically their hourly rate), the risks 

associated with the litigation, and a premium.”337 “But just because a lawyer works 

on contingency does not automatically warrant a significant award. ‘Not all 

contingent cases involve the same level of contingency risk.’”338 Cases that are 

“relatively safe in terms of forcing a settlement,” like claims only for additional 

disclosures, do not face significant contingency risk.339 This was not one of those 

cases. 

336 Ryan, 2009 WL 18143, at *13.

337 Franklin Balance Sheet, 2007 WL 2495018, at *12 (footnote omitted) (citing Seinfeld

v. Coker, 847 A.2d 330, 333–34 (Del. Ch. 2000)).

338 Sciabacucchi, 2019 WL 2913272, at *7 (quoting Activision, 124 A.3d at 1073).

339 In re Sauer-Danfoss Inc. S’holders Litig., 65 A.3d 1116, 1140 (Del. Ch. 2011) (internal 

quotation marks omitted) (quoting Cox Radio, 2010 WL 1806616, at *21); Schumacher v. 

Loscalzo, 2023 WL 4842103, at *5 (Del. Ch. July 28, 2023) (“A reduction of the $475,000 

[fee] sought is also supported by the remaining Sugarland factors. The case was low risk, 

settled early, and was neither difficult nor complicated. ‘“It offered a ready-made 

settlement opportunity” and was filed “with an obvious and well-marked exit in sight.”’” 

(quoting Sciabacucchi v. Howley, 2023 WL 4345406, at *5 (Del. Ch. July 3, 2023))).
95

3. The Time And Effort Expended, And The Standing 

And Skill Of Counsel

The time and effort expended by counsel is another secondary, or even 

tertiary, consideration to the benefits achieved.340 Delaware courts regard this 

consideration as a crosscheck to guard against windfall awards,341 “because the real 

measure of a fee award lies in the results achieved.”342 Courts have repeatedly 

acknowledged the shortcomings of the lodestar method, which can incentivize 

attorneys to inflate hours or billing rates.343 Accordingly, Delaware courts should 

first look to precedents on which to base a fee award, which I have done.344 

Plaintiffs’ counsel spent 3,425.9 hours on this case through May 1,345 but I give no 

340 E.g., Pontiac Gen. Empls. Ret. Sys. v. Ballantine, C.A. No. 9789-VCL, D.I. 49, at 40 

(Del. Ch. May 8, 2015) (TRANSCRIPT); Sciabacucchi, 2019 WL 2913272, at *6.

341 Olson, 2011 WL 704409, at *8 (citing Brinckerhoff v. Tex. E. Prods. Pipeline Co., LLC, 

986 A.2d 370, 396 (Del. Ch. 2010)).

342 Sciabacucchi, 2019 WL 2913272, at *6.

343 E.g., id. (quoting Sauer-Danfoss, 65 A.3d at 1138).

344 See, e.g., id.

345 D.I. 206 at Affidavit of Mark Lebovitch in Support of Proposed Settlement, Application 

for Attorneys’ Fees and Expenses, and Incentive Award for Plaintiffs ¶ 3 (affirming 

Bernstein Litowitz Berger & Grossmann LLP devoted 1,438.50 hours on this action 

through May 1, 2023); D.I. 210 at Corrected Affidavit of Michael J. Barry in Support of 

Plaintiffs’ Request for an Award of Attorneys’ Fees and Expenses ¶ 4 (affirming Grant & 

Eisenhofer, P.A. devoted 720 hours on this action through May 1, 2023); D.I. 206 at 

Affidavit of Thomas Curry in Support of Plaintiffs’ Request for an Award of Attorneys’ 

Fees and Expenses ¶ 4 (affirming Saxena White P.A. devoted 627.75 hours on this action 

through May 1, 2023); D.I. 206 at Affidavit of William J. Fields in Support of Plaintiffs’ 

Request for an Award of Attorneys’ Fees and Expenses ¶ 5 (affirming Fields Kupka & 

Shukurov LLP devoted 544.50 hours on this action through May 1, 2023); D.I. 206 at 

Affidavit of Jeremy Friedman in Support of Plaintiffs’ Request for an Award of Attorneys’ 
96

weight to the hours expended.

346

As explained, the standing and skill of counsel is a secondary factor. 

Plaintiffs’ counsel are well known to the Court. But in considering Plaintiffs’ 

counsel’s effort and standing, I find it necessary to consider what they have 

described as “missteps.”

347

 “Law firms establish a track record over time, and they 

‘build (and sometimes burn) reputational capital.’”348 From my perspective, 

potential “missteps” include but are not limited to: failing to abide by the Court’s 

practice of prompt responses to motions in expedited litigation, putting the Court in 

the burdensome position of having to urge responses;349 noncompliance with 

Fees and Expenses ¶ 4 (affirming Friedman Oster & Tejtel PLLC devoted 39.25 hours on 

this action through May 1, 2023); D.I. 206 at Affidavit of Richard A. Maniskas in Support 

of Proposed Settlement, Application for Attorneys’ Fees and Expenses, and Incentive 

Award for Plaintiffs ¶ 3 (affirming RM LAW P.C. devoted 55.9 hours on this action 

through May 1, 2023); PRB at 59 (“Plaintiffs’ counsel do not seek fees for post-settlement 

hours . . . .”).

346 E.g., Olson, 2011 WL 704409, at *15; see also Ams. Mining, 51 A.3d at 1257 

(“Sugarland does not require, as the Defendants argue, courts to use the hourly rate implied 

by a percentage fee award, rather than the benefit conferred, as the benchmark for 

determining a reasonable fee award. To the contrary, in Sugarland, this Court refused to 

adopt the Third Circuit’s lodestar approach, which primarily focuses on the time spent.”).

347 Hr’g Tr. 8 (“I know that we’ve had some missteps . . . .”).

348 Dell, 2023 WL 4864861, at *32 (“Law firms establish a track record over time, and they 

‘build (and sometimes burn) reputational capital.’” (internal quotation marks omitted) 

(quoting In re Del Monte Foods Co. S’holders Litig., 2010 WL 5550677, at *9 (Del. Ch. 

Dec. 31, 2010))).

349 E.g., D.I. 90 (reminding the parties to respond to motions); D.I. 163 (asking the parties 

if they were going to file the settlement papers for the proposed settlement they had 

announced nearly two weeks prior).
97

specific instructions;350 making misrepresentations to the Court and the class; and 

antagonism toward absent putative class members. While I will not discuss them all 

here, I will focus on a few. 

First, it appears Plaintiffs’ counsel failed to disclose a 2021 order from a 

California federal judge that required Bernstein Litowitz Berger & Grossman LLP 

(“BLBG”) “in future cases . . . seeking appointment as class counsel” to notify courts 

of his decision criticizing BLBG’s failure to disclose a potential conflict.351 

Plaintiffs’ counsel did not notify this Court of that decision when it sought 

appointment as lead counsel or in Plaintiffs’ opening brief in support of the Proposed 

Settlement. And while Plaintiffs’ counsel did discuss the related Chancery case in 

Plaintiffs’ reply brief in support of the settlement, Plaintiffs’ counsel failed to 

disclose the federal court’s order or address that Izzo raised it in her Objection.352 

This lack of candor to the Court is unacceptable.

350 D.I. 454 at 5 n.21 (“I repeat my insistence that the parties update the specified websites 

today, and every day a noted report or order is issued, to comply with paragraph 72 of the 

notice.”); D.I. 312 at 2–3 (“Before diving into the details, I pause on the Special Master’s 

observation that the parties filed the exhibits to their settlement briefs confidentially, 

contrary to my instructions. More fundamentally, I insist that counsel and AMC update 

their websites today to post the materials promised in paragraph 72 of the notice sent to 

stockholders.” (footnote omitted)); accord D.I. 587 at 4 n.13.

351 SEB Invs. Mgmt. AB v. Symantec Corp., 2021 WL 1540996, at *2 (N.D. Cal. 

Apr. 20, 2021). This action is C.A. No. 3:18-cv-02902 in front of Judge Alsup. Id.

352 PRB at 56 (citing In re Symantec Corp. S’holder Deriv. Litig. C.A. No. 2019-0224-JTL, 

D.I. 100, at 42–43 (Del. Ch. May 4, 2023) (TRANSCRIPT)); Symantec, C.A No. 2019-

0224-JTL, D.I. 100 (discussing the “Securities Action” that settled in February 2022 in 
98

Plaintiffs’ counsel also misrepresented in Plaintiffs’ opening brief in support 

of the Proposed Settlement that one of their clients at the time signed a Rule 23 

affidavit in support of the Proposed Settlement: he had not.353 They also delayed 

responding to Izzo’s counsel when they inquired about the nonexistent affidavit.354 

This issue caused consternation and burdened the Court.

Finally, Plaintiffs’ counsel seemed at times to forget its role as counsel for the 

putative class. As one example, Plaintiffs’ counsel broadcast a private disagreement 

between an absent putative class member and counsel.355 As another, they 

repeatedly failed to serve objectors.356 These issues also were a net negative on the 

progress of this litigation.

The burnt reputational capital in this action warrants a downward adjustment 

to the fee award.

* * *

front of Judge Alsup in the Northern District of California); In re Symantec Corp. S’holder 

Deriv. Litig. C.A. No. 2019-0224-JTL, D.I. 1 at 1 (Del. Ch. Mar. 20, 2019) (disclosing a 

related securities action, case number 3:18-cv-02902, then pending in the Northern District 

of California).

353 POB at 51 n.122 (citation reading “See [sic] Affidavits of Munoz, Franchi, and 

Allegheny.”).

354 D.I. 369 at 2 (citing D.I. 357 ¶¶ 8–9).

355 D.I. 306 at 3–4.

356 D.I. 369 at 2 (citing D.I. 344 at 5, and D.I. 357 ¶ 9); D.I. 580 ¶ B n.4 (citing D.I. 550 at 

Certificate of Service, and D.I. 575 at 6).
99

“In these circumstances, it is within the Court of Chancery’s discretion to 

reduce class counsel’s fee award.”

357

 Plaintiffs’ counsel is awarded fees and 

expenses of 12% of the recovery at the Settlement Class Time. 

As explained, the value of the recovery, i.e. the Settlement Shares, is difficult 

to precisely quantify today. And as explained, it is unnecessary and arbitrary for the 

Court to select one of Plaintiffs’ proposed dates to value the recovery in this matter 

for purposes of evaluating the settlement terms. 

I find I need not predict the value of the Settlement Shares to set a dollar 

amount for Plaintiffs’ counsel’s fee, either. The recovery is sourced wholly in the 

Settlement Shares, which will be publicly traded. That recovery will be paid 

“promptly” after the Reverse Stock Split and the Conversion are completed.358 And 

that recovery will be paid soon: the defendants have consistently maintained they 

intend to pursue the Proposals and Conversion promptly upon settlement approval. 

As explained below, I have declined to enjoin them from doing so pending Izzo’s 

appeal of the July 21 Opinion. 

Under these circumstances, speculating as to the future value of a share of 

AMC common stock makes little sense. I leave it to the parties to confer on the 

357 In re Coleman Co. Inc. S’holders Litig., 750 A.2d 1202, 1212 (Del. Ch. 1999) 

(collecting cases).

358 Notice ¶ 48.
100

value of the Settlement Shares as crystallized at the time those shares are issued, and 

on what 12% of that value represents. The parties should derive Plaintiffs’ counsel’s 

fee from the closing price of AMC common stock on the date Settlement Shares are 

issued. The parties should make any necessary adjustments to account for dilution 

to the legacy common stockholders, perhaps in the same manner as Plaintiffs’ expert,

to the extent that the stock price does not reflect any such dilution. In no event shall 

the fee and expenses exceed $20 million, per the agreement reflected in the Notice.359

F. Plaintiffs Are Granted Incentive Awards Out Of The Fee 

Award.

Plaintiffs seek approval of modest $5,000 incentive awards to Franchi and 

Allegheny, to be paid exclusively out of any fees awarded to Plaintiffs’ counsel. 

Public policy favors granting incentive awards. “Compensating the lead 

plaintiff for efforts expended is not only a rescissory measure returning certain lead 

plaintiffs to their position before the case was initiated, but an incentive to proceed 

with costly litigation (especially costly for an actively participating plaintiff) with 

uncertain outcomes.”360 The Court may grant incentive awards to representative 

plaintiffs where justified by the factors identified in Raider v. Sunderland: (i) the 

359 Id. ¶ 53.

360 Raider, 2006 WL 75310, at *1 (footnote omitted).
101

“time, effort, and expertise expended by the class representative,” and (ii) the 

“benefit to the class.”361 

Here, Plaintiffs meet the Raider factors. Franchi served a demand under 8 

Del. C. § 220, which this Court encourages as a tool to gather information before 

initiating a plenary lawsuit.362 Both Plaintiffs produced documents in discovery. 

Allegheny, in producing documents, “conducted electronic searches of emails and 

texts, and also searched and produced hard copy documents.”363 Franchi “searched 

for and produced documents and trading records.”364 Allegheny’s representative met 

with counsel and prepared for a deposition before it was cancelled.365 As explained, 

Plaintiffs should receive credit for conferring a benefit to the class. The size of the 

benefit does not factor into my calculations on their incentive awards. In typical 

361 Id. at *1; accord Morrison v. Berry, 2021 WL 2926138, at *1 (Del. Ch. July 12, 2021).

362 E.g., Seinfeld v. Verizon Commc’ns, Inc., 909 A.2d 117, 120 (Del. 2006) (recognizing

Delaware Courts’ encouragement to stockholders to use books and records demands as one 

of the “tools at hand” before filing representative litigation (footnote omitted)).

363 POB at 61.

364 Id. at 61.

365 Id. at 61–62.
102

baseline circumstances, an incentive award of $5,000 rewards competent 

participation.366 Here, $5,000 incentive awards are appropriate, if low.367

G. Izzo’s Request For A Stay Pending Appeal Is Denied.

Having approved the settlement, I now turn to Izzo’s motion seeking a stay 

such that the status quo order would remain in place pending an appeal, which Izzo 

states is forthcoming.368 Plaintiffs and the defendants responded on July 25 and 26, 

366 See, e.g., In re Galena Biopharma, Inc., Consol. C.A. No. 2017-0423-JTL, D.I. 69 at 

83–84 (Del. Ch. June 14, 2018) (TRANSCRIPT) (awarding $5,000 incentive fee for named 

plaintiff who did not sit for a deposition and characterizing $1,000 to $5,000 “nominal 

awards [as] understandable and appropriate”); Spritzer v. Aklog, C.A. No. 2020-0935-

KSJM, D.I. 29 at 44 (Del. Ch. Nov. 3, 2022) (TRANSCRIPT) (awarding $2,000 for 

plaintiff who did not participate in discovery and observing that awards of that magnitude 

incentivize “plaintiffs who are willing to put their names on the papers . . . when they know 

that they have to monitor litigation and may be called to sit for depositions and other forms 

of discovery and relief”); In re Homefed Corp. S’holder Litig., 2022 WL 489484, at *4 

(Del. Ch. Feb. 15, 2022) (ORDER) (awarding a $5,000 incentive award to each co-lead 

plaintiff); In re: Pivotal Software, Inc. S’holders’ Litig., 2022 WL5185565 (Del. Ch. Oct. 

4, 2022) (awarding a $10,000 incentive award to the plaintiff); In Re Straight Path

Commc’ns Inc. Consol. S’holder Litig., Consol. C.A. No. 2017-0486-SG, D.I. 750 ¶ 13 

(same) (Dec. 27, 2022) (ORDER).

367 Had Plaintiffs asked for larger incentive awards, the nature of this litigation would have 

supported their award. Plaintiffs, like their counsel and the Court, were subject to an 

unusual level of harassment from the time of filing the complaints throughout this 

settlement process. POB at 62; Allegheny Aff. ¶ 7; Second Franchi Aff. ¶ 6. Plaintiffs’ 

counsel speculated that harassment led Munoz to effectively withdraw from his role as 

plaintiff. D.I. 366 ¶¶ 3, 7; see also D.I. 366, Ex. A.

368 Because the Court has not yet approved the amount of Plaintiffs’ counsel’s fees, neither 

this decision nor the order issued with it are final; any appeal would be interlocutory. See 

Del. Tech. & Cmty. Coll. v. State of Del. Hum. Rels. Comm’n, 2017 WL 2180544, at *5 

(Del. Super. May 17, 2017); In re Tex. E. Overseas, Inc., 2009 WL 5173805, at *2 (Del. 

Ch. Dec. 23, 2009) (“[T]here is no order from which an appeal may be taken and, thus, any 

motion for a stay pending appeal is not yet ripe.”). Nevertheless, for the sake of ensuring 

the parties can perform the settlement obligations in a prompt manner, I assume for 
103

respectively, opposing the request,369 and Izzo filed a reply on July 31.370 Izzo’s 

request for a stay is governed by Court of Chancery Rule 62(b), which provides:

In its discretion and on such conditions for the security of the adverse 

party as are proper, the Court may stay the execution of or any 

proceedings to enforce a judgment pending the disposition of a motion 

for a new trial or to alter or amend a judgment made pursuant to Rule 

59, or of a motion for relief from a judgment or order made pursuant to 

Rule 60.371

Rule 62(d) states that “[s]tays pending appeal and stay and cost bonds shall be 

governed by article IV, § 24 of the Constitution of the State of Delaware and by the 

Rules of the Supreme Court.”372 Supreme Court Rule 32(a) provides that “a motion 

purposes of this analysis that Izzo would file an interlocutory appeal, and would meet the 

requirements in this Court and the Delaware Supreme Court for an interlocutory appeal.

Izzo has not filed an appeal, interlocutory or otherwise, so under most circumstances, 

her motion for a stay pending appeal would not be ripe. On July 26, the defendants 

submitted a letter expressing a need to consummate the Reverse Stock Split and Conversion 

as quickly as possible so that the Company can raise additional capital through the sale of 

common stock. D.I. 595. That letter also stated that the Company was required to give ten 

days’ notice to the New York Stock Exchange “before effecting the reverse stock split and 

conversion” and that the Company has a financial need to sell additional stock before the 

last two weeks of August, as those weeks are “are a historically quiet period in the financial 

markets.” Id. at 4. Under these circumstances, deciding the motion now is appropriate, as 

it avoids further delay. See XL Specialty Ins. Co. v. WMI Liquidating Tr., 93 A.3d 1208, 

1217 (Del. 2014) (“A ripeness determination requires a common sense assessment of 

whether the interests of the party seeking immediate relief outweigh the concerns of the 

court ‘in postponing review until the question arises in some more concrete and final 

form.’” (quoting Stroud v. Milliken Enters., Inc., 552 A.2d 476, 480 (Del. 1989)).

369 D.I. 589 ¶¶ 6–13; D.I. 593.

370 D.I. 604. 

371 Del. Ch. Ct. R. 62(b).

372 Del. Ch. Ct. R. 62(d).
104

for stay must be filed in the trial court in the first instance” and “[a] stay or an 

injunction pending appeal may be granted or denied in the discretion of the trial 

court.”373

In deciding whether to grant an injunction, the Court considers what are 

referred to as the Kirpat factors: 

(i) the likelihood of success on the merits 

of the appeal; (ii) whether [the moving party] would suffer 

irreparable harm if the stay was not granted; (iii) whether [any 

interested party] would suffer substantial harm if the stay was 

granted; and (iv) whether the public interest would be served if 

the stay was granted.374

“No one factor is dispositive; rather, the Court will carefully weigh all relevant 

considerations.”375 When a litigant seeks a stay pending appeal, she bears the burden 

of showing the stay is warranted.376

The first Kirpat factor is whether the litigant seeking a stay has demonstrated 

a likelihood of success on appeal.377 A likelihood of success will be shown if the 

party seeking the stay “has presented a serious legal question that raises a ‘fair 

373 Del. Supr. Ct. R. 32(a).

374 Homestore, Inc. v. Tafeen, 886 A.2d 502, 504 (Del. 2005) (citing Kirpat, Inc. v. Del. 

Alcoholic Bev. Control Comm’n, 741 A.2d 356 (Del. 1998)).

375 Wynnefield P’rs Small Cap Value L.P. v. Niagara Corp., 2006 WL 2521434, at *1 (Del. 

Ch. Aug. 9, 2006).

376 See Zhou v. Deng, 2022 WL 1617218, at *2 (Del. Ch. May 23, 2022) (quoting Lynch v. 

Gonzalez, 2020 WL 5648567, at *4 (Del. Ch. Sept. 22, 2020)).

377 Homestore, 886 A.2d at 504 (citing Kirpat, 741 A.2d 356).
105

ground for litigation and thus for more deliberative investigation.’”378 In 

determining whether this standard is met, our courts have considered, among other 

things, whether the issue raised is novel and whether an unsettled area of Delaware 

law is involved in the adjudication of the issue.379

The only issue Izzo identified for appeal concerns whether the Release is 

properly interpreted as encompassing future claims.380 Izzo objected to the Proposed 

Settlement on the basis that the Release encompassed claims “based on a set of 

operative facts that will occur in the future.”381 The July 21 Opinion rejected her 

argument, reasoning that her “reading misinterprets the Release,” which included 

378 Kirpat, 741 A.2d at358 (quoting Wash. Metro. Area Transit Comm’n v. Holiday Tours, 

Inc., 559 F.2d 841, 844 (D.C. Cir. 1977)).

379 See id. at 358 (finding a likelihood of success on appeal where the appellant raised an 

issue of first impression); Gans v. MDR Liquid. Corp., 1999 WL 669364, at *1 (Del. Ch. 

Aug. 17, 1999) (declining to find likelihood of success where the appeal presented “no 

issues of first impression [and involved no] unsettled areas of Delaware law”).

380 Of course, Izzo identified this issue to appeal before this opinion was published. 

381 Izzo Obj. at 33 (internal quotation marks omitted) (quoting Griffith v. Stein ex rel. 

Goldman Sachs Grp., Inc., 283 A.3d 1124, 1134 (Del. 2022))). It is strange that Izzo would 

appeal the Court’s July 21 Opinion on this basis. Izzo correctly identifies that it would be 

problematic for the Release to encompass claims arising from events or actions that have

not yet occurred. Griffith, 283 A.3d at 1134 (quoting Phila. Stock Exch., 945 A.2d at 1146). 

The defendants asserted that the Release does not encompass such claims, arguing that the 

Release’s language “makes clear that [it] does not apply to future events.” D.I. 441, at 

Defendants’ Reply Brief in Further Support of Proposed Settlement, at 21–22. And the 

July 21 Opinion held that the Release did not encompass future claims. AMC, 2023 WL 

4677722, at *24 n.186. Any party wielding the Release to defeat a “future claim” would 

have to overcome this holding, as well as the defendants’ statements that it did not apply.
106

“two limitations [that] make clear the Release does not apply to future events.”382 

Izzo’s motion raises only an ordinary question of contract interpretation,383 and is 

therefore insufficient to establish “a fair ground for litigation and thus for more 

deliberative investigation.”384

As for the second Kirpat factor, Izzo will suffer irreparable harm if a stay is 

not granted. Approval of the Proposed Settlement will lift the status quo order.385 

Once the status quo order is lifted, the Company is free to effectuate the Reverse 

Stock Split and Conversion, and I read the defendants’ July 26 letter as expressing 

an intention to do so as quickly as possible.386 Post-Conversion, the converted shares 

382 AMC, 2023 WL 4677722, at *24 n.186.

383 Fox v. Paine, 2009 WL 147813, at *5 (Del. Ch. Jan. 22, 2009) (“A settlement agreement 

is construed using contract interpretation principles.”), aff’d, 981 A.2d 1172 (Del. 2009).

384 Zohar Cdo 2003-1, LLC v. Patriarch P’rs, LLC, 2016 WL 6661932, at *1 (Del. Ch. 

Nov. 10, 2016) (“Patriarch’s arguments on appeal will not present issues of first impression 

or pressing issues of Delaware law for resolution by the Supreme Court. Rather, 

Patriarch’s arguments involve straightforward issues of contract interpretation. Therefore, 

Patriarch’s appeal does not present ‘a fair ground for litigation and . . . more deliberative 

investigation.’” (alteration in original) (footnote omitted) (quoting Kirpat, 741 A.2d at 

358); Frankino v. Gleason, 1999 WL 1063071, at *2 (Del. Ch. Nov. 12, 1999) (declining 

to find likelihood of success because case involved “straightforward application of the 

contract law principles employed when interpreting bylaw provisions”); Gans, 1999 WL 

669364, at *1 (same). I reject Izzo’s suggestion that because aspects of this case are 

“unprecedented,” any issues Izzo may raise on appeal are issues of first impression. 

D.I. 604 ¶ 5 (“Unless the settlement is rejected, any subsequent opinion and final order in 

an unprecedented case will undoubtedly raise further substantial questions deserving 

attention from the Delaware Supreme Court.”).

385 Stip. ¶ 4.

386 See D.I. 595 at 4.
107

will be freely traded on the New York Stock Exchange, and will likely change hands 

before a final appellate decision is rendered. It will, as a practical matter, be difficult, 

if not impossible, to unwind those transactions if our Supreme Court finds that the 

Release is overbroad and that the settlement should be rejected.

387

But the harm to the Company, and therefore to its stockholders (including 

Izzo), would be even greater if this action is stayed pending appeal, and so the third 

Kirpat factor weighs heavily against issuing a stay. The defendants anticipate the 

Company will have to raise additional capital through equity sales to stave off 

bankruptcy and remain in compliance with its loan covenants.388 As explained 

above, AMC’s second quarter financials reveal a continued need to sell equity to 

raise cash despite recent earnings.389 

Lifting the status quo order enables the consummation of the Reverse Stock 

Split and Conversion, which will free up additional common stock for sale. If the 

387 See Strassburger v. Earley, 752 A.2d 557, 579 (Del. Ch. 2000) (“A significant delay 

. . . without more, will normally make impractical any rescission of a corporate transaction, 

particularly one involving publicly traded securities.”); Winston v. Mandor, 710 A.2d 831, 

834 (Del. Ch. 1996) (“[T]he practical difficulties of undoing purchases made by good faith 

purchasers for value on a national securities exchange lends additional weight to 

defendants’ position.”); see also Gimbel v. Signal Cos., Inc., 316 A.2d 599, 603 (Del. Ch. 

Jan. 10, 1974) (“While the remedy of rescission is available, it is not difficult to imagine 

the various obstacles to such a remedy including, tax consequences, accounting practices, 

business reorganizations, management decisions concerning capital investments, 

dividends, etc. and a host of other problems which as a practical matter will make rescission 

very difficult indeed.” (citation omitted)), aff’d, 316 A.2d 619 (Del. 1974).

388 D.I. 593 at 13–14.

389 See supra, notes 3023–307, and accompanying text.
108

Company filed for bankruptcy before an appellate decision were issued, both the 

common stockholders and APE unitholders would almost certainly suffer a complete 

loss of their investment. 

If those transactions are not completed, the Company may have to sell 

additional APEs, which would harm AMC’s common stockholders. And APEs have 

traded at a significant discount to the Company’s common stock, meaning such APE 

sales would be far more dilutive than the sale of common stock.390 Because the 

settlement consideration partially remedies the dilution caused by previous APE 

issuances through what is essentially a reallocation of value between the common 

shares and APEs,391 the sale of additional APEs pending appeal would reduce the 

value of the settlement consideration. Under these circumstances, the harm to the 

390 For example, on August 4, 2023, AMC common stock closed at a price of $4.90 per 

share while APE closed at $1.73 per unit. AMC Ent. Hldgs., Inc. Class A Common Stock 

Historical Data, Nasdaq, https://www.nasdaq.com/market-activity/stocks/amc/historical 

(last visited Aug. 9, 2023); AMC Ent. Hldgs., Inc. AMC Preferred Equity Units Historical 

Data, Nasdaq, https://www.nasdaq.com/market-activity/stocks/ape/historical (last visited 

Aug. 9, 2023). The Court may take judicial notice of these securities’ prices because such 

prices are facts that “are not subject to reasonable dispute.” Lee v. Pincus, 2014 WL 

6066108, at *4 n.11 (Del. Ch. Nov. 14, 2014).

391 AMC, 2023 WL 4677722, at *12 (“The Proposed Settlement has the practical effect of 

reallocating the ownership of AMC’s equity between its common stockholders and the 

APE unitholders.”).
109

Company and its stockholders far outweighs the harm to Izzo, which counsels 

against granting the stay.392

Finally, I turn to the last Kirpat factor, which is whether the grant of a stay 

would favor the public interest.393 Izzo argues “an appeal will raise at least one, and 

likely several, important questions which the Delaware Supreme Court should have 

the opportunity to consider.”394 I disagree. The only issue identified by Izzo is 

whether this Court should have interpreted the Release as encompassing claims 

based on future events or conduct, which is an issue of contract interpretation. Izzo 

has failed to identify any public interest that would be served by granting a stay.

Thus, even though Izzo would face irreparable harm absent a stay, she has 

failed to show a likelihood of success and the Company and its stockholders would 

face substantial harm if a stay were granted. Applying the Kirpat factors holistically, 

I find that Izzo has not carried her burden, and her motion is denied.395

392 Zohar, 2016 WL 6661932, at *2 (denying motion for stay where the harm to the 

interested parties outweighed the harm to the moving party). I also reject Izzo’s suggestion 

that the Company will not face substantial harm because it “has multiple short-term 

financing options.” D.I. 583 ¶ 21. This is apparently based solely on a January 2023 Antara 

debt proposal, which the Company rejected. Id. (citing D.I. 556); D.I. 556 at 22–24 (citing 

PRB, Ex. 10). Izzo has not shown that such an offer would still be available, and that if it 

were available, that the terms would be more favorable to the Company and its stockholders 

than APE equity financing option.

393 Homestore, 886 A.2d at 504 (citing Kirpat, 741 A.2d 356)).

394 D.I. 583 ¶ 22.

395 Because the stay is denied, I need not address the supersedes bond issue. “The primary 

purpose of the security, or supersedeas bond, is to protect the appellee from losing the 
110

III. CONCLUSION

For the forgoing reasons, the Proposed Settlement is approved, Plaintiffs’ 

counsel are awarded a 12% fee award, and Plaintiffs are awarded $5,000 incentive 

awards out of their counsel’s fee award. 

benefit of the judgment through the delay or ultimate non-performance by the appellant.” 

DiSabatino v. Salicete, 681 A.2d 1062, 1066 (Del. 1996). Nevertheless, I note that a 

meaningful bond would be required in light of the Company’s present circumstances. See 

Zimmerman v. Crothall, 2014 WL 257461, at *2 (Del. Ch. Jan. 23, 2014) (“Here, 

Defendants have not demonstrated that posting security in an amount that is less than the 

amount of the Judgment sufficiently would protect the appellee, TWF. Indeed, they have 

stated that Adhezion is in dire financial condition . . . and will expend in the near future 

more than $1.8 million in cash on taxes and projects. These are the very circumstances 

that generally require the posting of security at least equal to the full amount of the 

Judgment to sufficiently protect against the risk of nonperformance by the appellant.”); see 

also D.I. 593 ¶ 19 (speculating that the harm from dilutive APE financings would equal 

approximately $100 million per quarter).