Opinion ID: 2402127
Heading Depth: 1
Heading Rank: 7

Heading: Plaintiffs' Amended Complaint

Text: The plaintiffs asserted two basic claims in the Amended Complaint. The first is that United Artists violated the covenant of good faith and fair dealing that inhered in the Warrants (as contracts) by engaging in a merger structured effectively to reclassify identical interests in [United Artists] equity according to whether the interests were owned by favored insiders and to arrogate the true value of [United Artists] to selected owners of the identical equity interests. The plaintiffs contend that the Exchange Offer in which the UA Holders exchanged their equity interests in United Artists (including their Warrants) for equity interests in Regal Entertainment, was a de facto merger in which all Warrantholders should have had the opportunity to participate. In essence, the plaintiffs, as Warrantholders, contend that they should have had the same opportunity as the UA Holders to exchange their Warrants for Regal Entertainment warrants. The plaintiffs' first claim is not predicated on any explicit term of the Warrants, but rather, as noted by the Court of Chancery, on the implied covenant of good faith and fair dealing. In a separate count, the plaintiffs allege that the remaining defendants (i.e., Anschutz and certain other companies he controls) tortiously interfered with the Warrants by excluding the plaintiffs from participating in the Exchange Agreement on equal terms with the UA Holders. The plaintiffs' second claim is a variation of the first. The plaintiffs argue that the Warrantholders should have received consideration in the short-form Merger equivalent to fair value under Section 262. The plaintiffs submit that this right flows from Section 2(c) of the Warrant Agreement. The plaintiffs contend it is obvious that Section 2(c) was breached, because the $14 per share that United Artists offered the Warrantholders in the Merger is worth substantially less than what the UA Holders received from Regal Entertainment for their Warrants under the Exchange Agreement. This second contract claim is pled directly against United Artists, and the remaining defendants are accused of having tortiously induced the breach of Section 2(c).