COURT OF CHANCERY OF THE STATE OF DELAWARE
M ORGAN T

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

- 3734 May 24, 2023

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

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

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

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

, Sui te 104 Wilmington, DE 19810

V ia Electronic Mail Jordan Affholter 1501 Hatcher Crescent Ann Arbor, MI 48103 jordanaffholter@ gmail.com

RE : In r e AMC Entertainment Hol dings, Inc. Stockholder Litigation , Consol. Civil Action N o. 2023

- 0215

- MT Z

D e ar C ounsel and Mr. Affholter :

On Ma y 20, I issued a letter opinion adopting the May 19 Report and Recommendation of Special Master Regarding Class Member Access to the Dis covery Record (the (“May 20 Opinion” and the “May 19 Report

, ” respect ively ). 1 In relevant part, the May 20 Opinion o verruled an objection to a proposed confidentiality agreement that objectors must sign to access the discovery

1 Docket It em ( “ D.I. ” ) 312 ; D.I. 307.In r e AMC En ter tainment Holdin gs, Inc. Stockh older Litigation

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record in t his case, specifi ca lly its enumerated consequences for trading AMC stock after accessing the discovery record but before this case is over

. 2

Later o n May 20, Mr. Affholter received an email from AMC.Settlement@blbglaw.co m stating, “ This email is in response to your reques t to a ccess the discovery recor d in In re AMC Entertainment Holdings, Inc. Stockhold er Litigation .” 3 The email asked Mr. Affholter to sign the agreement attached to the stipulation app roved by the May 20 Opinion. It does not appear that he has done so. On May 22, M r. Affholter filed a letter titled “ Letter to Vice Chancellor and Special Master Corinne Elise Amato, Esq. from Jordan Affholter [:] Motion for Enlargement of Time and Objection to the Dis covery Process” (the “Motion”)

. 4 He is not a party to th is action

. 5 Part of his Motion takes issue with the confidentiality agreement and requirement to supply proof of beneficial ownersh ip adopted in th e May 20 Opinion. 6 Last night, t he parties responded to Mr . Affholter ’ s Motion

. 7 As I have already ruled o n the confidentiality agreement, and in the interest of time, I hav e taken up th ese aspect s of Mr. Affholter’s Motion rather than refer them to the Special Master.

First, I address Mr. Affhol ter’s objections to the Cou rt’s adoption of the Special Master’s recommendation that “objectors submit proof of benefici al

owner ship as a condition of accessing the discovery record.” 8 One has standing to

2 D.I. 312 at 3 n .7 (citing Steinhardt v. Howard

- Anderso n , 2012 WL 29340, at *8

– 11 (Del. Ch. Jan. 6, 2012))

.
3 D.I. 320 at 8. Mr. Affholter did no t paginate his filing, so I have count ed the pdf pages and reference those.

4 Id. a t 2.

5 D.I. 302 (den ying Mr. Affholt er’s m otion to intervene). Mr. Affholter did not file exceptions to the Special Master’s report denying his intervention

. Ct. Ch. R. 144(d)(2).

6 D.I. 312 at 3; D.I. 307 at 9 n .28 ; D.I. 294, Ex. A at Ex

. B [hereinafter “Objecto r Ag r.”]; D .I. 184, Ex. B ¶ 65; D.I. 185 ¶ 19; D.I. 190, Ex. 1 at 2.

7 D.I. 327; D.I. 328.

8 D.I. 312 at 2

– 3; D.I. 307 at 8 (“To access the discov ery record, an individual must have standing to object to t he settlement. To have s tanding to object, an individual must be a member of the se ttlement class, as defined by the Stipulation of Settlement.” ).In r e AMC En ter tainment Holdin gs, Inc. Stockh older Litigation

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object to a settlement if they are a mem ber of the putative settlement class

. 9 S tatus

as a putative class member w ith standing to object begets the right to the discovery record

. 10 “ The party invoking the jurisdiction of a court bears the burden of establishing the eleme nts of standing .” 11 Accordingly, objectors

— not the litigation parties

— have the burden to prove they are members of the class with stand ing to object and therefore the right to access the discovery rec ord

. Second, I addre ss Mr. Affolter’s objec tion to paragraphs 4, 5, and 8 of th e Objector Agreement to Be Bound by Stipulation and Order for the Producti on of Confi dential and Highly Confidential Inf ormation (the “Ob

jector Agr eement”). 12 Those paragraphs provide :

4. I agree not to disclose any Confidential or Highly Confidential Disc overy Material on any social media platform, including but not limited to , Facebook, Twitter, YouTube, LinkedIn, TikTok, or Reddit, on a ny website, or on any blog. 13

9 See Devlin v. Scardelletti , 536 U.S. 1, 6

– 7 (200 2) (noting that as long as an individual is a member of th e class, that individual “has an interest in the settlement that creates a ‘ca se or controversy’ sufficient to satisfy the constitutional requiremen ts of injury, causation, and redressability” (cita tions omitted)).

10 See, e.g.

, Ginsburg v. Phila

. Stock Exc h., Inc. , 2007 WL 2982238, at *1 (Del. Ch. Oct. 9, 2007) ( “ Delaware law requires tha t these objectors have some opportunity to rev iew the discovery obtained by the class counsel durin g the course of the litigation.”); In re Amsted Indus., Inc. Litig. , 521 A.2d 1104, 1108 (Del. Ch. 1986) ( “ Review of suc h materials should place an objector in the same positi on as the class representati ve who has proceeded in good faith when that represen tative elected to recommend the settlement to the Court. ” ).

11 Dover Hist. Soc. v. City of Dover Pl an. Comm ’ n , 838 A.2d 1103, 1 109 (Del. 2003) (citing Lujan v . Defenders of Wildlif e , 504 U.S. 555, 561 (1992)).

12 D.I. 320 at 9; Objector Agr. ¶¶ 4

– 5, 8.

13 See also D.I. 31 4 at 3 n.7 (“To be clear: stockholders may not take pic tur es, screenshots, or scree n recordings of the documents, and may not post or sh are th em online or in messaging apps in any format including but not limited to, social media, online dr ives or drop box es, Discord, Telegram, or YouTube.”)

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5. I agree that any filing I make with the Court that contains any Confidential or Highly Confidential Discovery Material must be made as a Confidential Filing, c onsistent w ith Paragraph 12 of the Stipulation.

. . .
8. I ag ree that I wi ll not buy or sell any AMC Entertainment Holdings, Inc. (“AMC”) securities until the final resolution of the Action, which means either that the Court has issued a Final Judgment a nd the time to appeal that Final Judgment has lap sed or
any app eal of the Fi nal Judgment has be en finally resolved. 14

M r. Affholter interprets paragraphs 4 and 5 of the Objector Agreem ent to “imply that objectors and supporters who have signed the agreemen t [] cannot discuss the findings of discovery with other approve d and signed objectors and
suppo rters,” and objects to this prohibition. 15 He does not rely on any law in support of his o bjections.
Mr. Affholter’s objections to paragraphs 4 and 5 of the Ob jector Agre ement are denied. AMC’s confidentiality concerns ar e legitimate. And as set forth in the Objector Agreement itself, access to the Confidential and Highly Confidential disco very record was gra nted to permit the signator ies to inform their perso nal objecti on s

. 16 Stockholders seeking advice o n whether or how they should object are encouraged to seek legal counsel, not the advice of other stockholders or the online community a t large.

14 Objector Agr. ¶

¶ 4

– 5, 8

.
15 D.I. 320 at 10

.
16 Objector Agr. ¶ 3 ( “ I agree not to disclose any Confident ial or Highly Confidential Discovery Material (as defined in the Stipulation) to any other person, under any circumstances, apart from in filings with the Court. ” ) ; id. ¶ 1 1 (“I under stand that the only purposes for which I can use Confidential or Highly C onfidential Discovery Material are to determine whether to object, or to present an objection, to the proposed settlement of th e Action.”); Amsted , 521 A.2d at 1107

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Mr. Affholter also objects to paragraph 8. 17 The Motion does not cite any la w in support of this objection. In stead, Mr. Affho lter contends that “ paragraph 8 essentially locks the objectors and supporters int o not being able to buy or sell their legally owned AMC stock until a final judgement has been rendered either in the Trial Court o r the Appe llant [sic] Court. That time fra me could potentially take months or years.” 18 He speculates tha t AMC’s stock price might “run [] up again (like it did historically)” or “an objector [or] supporter [might] have an issue of fina ncial hardsh ip” at s ome point between signing the Objector Agre ement and the resolution of this matter, which would preven t “objectors and supporters wh o execute this confidentiality agreement” from being able to trade at those opportune times

. 19

These ar guments do n ot dissuade me from my conclus ion in th e May 20 Opi nion that more stringent protections are warranted to ensure the access afforded

numerous unrepresented objectors does not lead to securities violations or misuse of confidential informatio n

. 20 “[C ]ourts faced with discovery requests at the settlement stag e must balance carefully the needs and burdens involved, as well as the potential for abuse. ” 21 I subscribe to the n

- Vice Chancellor Strine’s statements in In re Netsmart Tech nologies , Inc. S har e hol ders Litig ation and Berger v. Icahn Enter prises L.P

. , that access to confide ntial discovery information and participation in representative litigation can properly cost the ability to trade. 22 A stockholder with access to material nonpublic informati on wil l be hard pressed to

17 D.I. 320 at 9

– 1 1

.
18 Id. at 9

.
19 Id.

20 D.I. 312 at 3 (citing Steinhardt , 2012 WL 29340 , a t *8

– 11 , and In re Netsmart Techs., Inc. S’holders Litig

. , Consol. C.A. No. 2563

– VCS (Del. Ch. July 16, 2007) (ORDER), and Sample v. Morg an , C.A. No. 1214

– VCS, at 8 (Del. C h. May 14, 2008) (TRANSCR IPT))

.
21 7B Alan Wright, Arthur Miller & Mary Kay Kane, Fed eral Practice and Procedure § 1796.1 (3d ed. )

.
22 In re Netsmart Techs., Inc. S ’ holders Litig. , Consol. C.A. No. 2563

– VCS (Del. Ch. April 11, 2007) (TRANSCRIPT) (docketed at C.A. No. 2597

- VCS, D.I. 33); Berger v. Icahn Enters. L.P. , C.A. No. 3522

- VCS, at 55

– 56, 59 (Del. Ch. Oct. 23, 2009) (TRANSCRIPT).In r e AMC En ter tainment Holdin gs, Inc. Stockh older Litigation

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establish a trade was not based on tha t information. R estrictions on trading are an
appropr iate precaution imposed on access to AMC’s confidential information. Each stockholder can make his or her own determination as to whethe r they wish to commit to those restrictions to view the discovery record

. The Spec ial Master will address the other p oints in Mr. Affholter’s Motion in due course

.

Since r ely,

/ s/ Mor gan T. Z urn

Vice Ch an cellor

MTZ/m s

cc : All Coun sel of Rec o rd

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