Court Opinion

ID: 9400644
Source: CourtListenerOpinion
Date Created: 2023-06-08 18:04:54.892384+00
Date Added: 2024-06-11T17:19:46.970064
License: Public Domain

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN RE AMC ENTERTAINMENT                             )
HOLDINGS, INC. STOCKHOLDER                          ) Consol. C.A. No. 2023-0215-MTZ
LITIGATION                                          )

                           ORDER DENYING EXCEPTIONS

         WHEREAS:

         A.     On May 28, 2023, nonparty Jordan Affholter filed a “Response and

Objection to the Report and Recommendations of the Special Master – Regarding

Affholter’s Motion for Enlargement of Time,”1 which the Court has accepted as

exceptions to the Special Master filed on May 252 addressing those portions of Mr.

Affholter’s motion3 that the Court did not resolve in the first instance.4 The Court

ordered the parties to brief those exceptions, which they did, culminating in Mr.

Affholter’s reply filed June 4.5          This order refers to these exceptions as the

“Affholter First Exceptions,” and the subject report as the “May 25 Report.”

         B.     On May 31, Mr. Affholter filed a notice of exceptions6 to the Special

Master’s report filed on May 30.7 He filed an opening brief8 and then a reply

1
    Docket Item (“D.I.”) 352.
2
    D.I. 341.
3
    D.I. 320.
4
    D.I. 330.
5
    D.I. 353; D.I. 363; D.I. 411; D.I. 412; D.I. 420.
6
    D.I. 394.
7
    D.I. 365.

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addressing plaintiffs’ opposition to his May 28 exceptions on June 4.9 This order

refers to these exceptions as the “Affholter Second Exceptions,” and the subject

report as the “May 30 Report.”

         C.      On June 1, nonparty Etan Leibovitz submitted a notice of exceptions10

(the “Leibovitz Exceptions”) to the May 30 Report addressing his motion11 and the

Special Master’s report filed May 23 (the “May 23 Report”).12 He indicated his

intention to make a further submission this week.

         D.      Finally, on May 31, nonparty Alex Mathew filed a “response” and

“counter argument” to the May 30 Report (the “Mathew Submission”).13

         AND NOW, on this 8th day of June, 2023, the Court finds and orders as

follows:

         1.      The Court has adopted the Special Master’s recommendation in the

May 25 Report that the Court accept in-person attendance forms postmarked up to

and including May 31, 2023.

8
    D.I. 404.
9
    D.I. 421.
10
     D.I. 397.
11
     D.I. 343.
12
     D.I. 326.
13
     D.I. 393.

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         Affholter First Exceptions

         2.      A hearing on the Affholter First Exceptions is unnecessary. The

Court has considered de novo the rulings in the May 25 Report.14

         3.      The Court agrees with the May 25 Report’s conclusion that Mr.

Affholter “is not a class representative and cannot obtain relief on behalf of

others.”15 The Special Master denied Mr. Affholter’s motion to intervene, and he

did not take exception: he is a nonparty without standing to move this Court for

relief.16

         4.      Mr. Affholter has not submitted an objection.17 His complaints about

a technical hiccup in the objections email portal, and the delay in publishing public

versions of the exhibits cited in the parties’ briefs, could have been considered as

objections.       Mr. Affholter instead has chosen file multiple motions he lacks

standing to file.18

         5.      Plaintiffs represent that Mr. Affholter also helped draft a

sixty-seven-page “Form Objection” he made available to AMC stockholders, and
14
     See DiGiacobbe v. Sestak, 743 A.2d 180, 184 (Del. 1999) (citation omitted).
15
     D.I. 341 at 6.
16
   D.I. 330 at 2 n.5; Sanders v. Wang & Computer Assoc’s, 1998 WL 842281, at *3 (Del.
Ch. Nov. 19, 1998) (“In order to have standing to seek a stay of this action, the Movants
must be parties following leave to intervene. Since the Motion to Intervene is denied as
to [three stockholders,] they do not have standing to seek a stay of this action.”).
17
   D.I. 412 ¶ 1; D.I. 435 at 2. Mr. Affholter did not paginate his filing, and it did not
included numbered paragraphs, so I have counted the PDF pages and reference those.
18
     D.I. 188; D.I. 320; D.I. 345; D.I. 355; D.I. 405.

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the public at large, on May 16, 2023.19 Mr. Affholter had no difficulty utilizing the

information available to him to craft his motions and the Form Objection. His

request for relief based on prejudice to himself appears unfounded, and he lacks

standing to seek relief. As for prejudice to other stockholders, Mr. Affholter is not

an attorney; representing the interests of other stockholders in this proceeding risks

committing the unauthorized practice of law.20

         6.     The Court agrees with the May 25 Report’s conclusion that the

confusing automatic email that objectors received for a seven-day period is not

cause for extending the objection deadline. Plaintiffs’ counsel remediated this

issue and assured each objector who received the email that their objection had

been received.

19
     D.I. 412 ¶ 8; see also D.I. 356 ¶ 16 n.18.
20
   See Del. State Bar Ass’n v. Alexander, 386 A.2d 652 (Del. 1978); In re Arons, 756
A.2d 867 (Del. 2000) (en banc); id. at 874 (“This Court does not exercise its inherent
authority to regulate the practice of law for the purpose of protecting the financial interest
of the lawyer. Our role is to insure that the public will enjoy the representation of
individuals who have been found to possess the necessary skills and training to represent
others.”); In re Petition of Machette, 852 A.2d 908, 2004 WL 1535729, at *2 (Del. 2004)
(TABLE); Chang v. Childrens’ Advocacy Ctr. Of Del., Inc., 2016 WL 7188105, at *4
(Del. Super. Dec. 9, 2016) (“The unauthorized practice of law ‘occurs where there is an
exercise of judgment on a legal matter by someone acting in a representative capacity . . .
if it occurs in Delaware, on a matter of Delaware law, by someone not admitted to the
Delaware Bar.’” (quoting Townsend v. Integrated Mfg. & Assembly, 2013 WL 4521087,
at *1 (Del. Super. July 30, 2013))); Del. Health Corp. v. Brooks, 2010 WL 3103669, at
*1 (Del. Com. Pl. July 14, 2010); Snyder v. Martin, 820 A.2d 390 (Del. Fam. 2001).
Persons not admitted to practice law before this Court who represent others before this
Court are subject to prosecution for the unauthorized practice of law by Delaware’s
Office of Disciplinary Counsel. See Machette, 852 A.2d 908, 2004 WL 1535729, at *2.

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         7.    The Court also agrees with the May 25 Report’s conclusion that the

frustrating delay in publishing public versions of the exhibits cited in the briefing is

not cause for extending the objection deadline.             Lead Plaintiffs’ counsel has

explained the delay in publishing the exhibits, and the Court accepts that

explanation.21 The exhibits were published on AMC’s investor relations website,

one of the many sources of public notice of these proceedings.22

         8.    Mr. Affholter’s First Exceptions are DENIED.

         Affholter Second Exceptions

         9.    A hearing on the Affholter Second Exceptions is unnecessary. The

Court has considered de novo the rulings in the May 30 Report.23

21
   But there is no explanation for the continued lack of compliance with paragraph 72 of
the notice sent to stockholders, which requires “copies of the Stipulation, the Complaint,
Settlement Briefs, the Special Master’s report and recommendations, and any related
orders entered by the Court [to] be posted . . . online at the ‘Investor Relations’ section of
AMC’s website, investor.amctheatres.com/newsroom/default.aspx, and Lead Counsel’s
websites, blbglaw.com, gelaw.com and fksfirm.com , or you can reach out to Lead
Counsel at AMCSettlementObjections@blbglaw.com.” D.I. 185, Notice of Pendency of
Stockholder Class Action and Proposed Settlement Hearing, and Right to Appear ¶ 72.
As of the date of this letter, AMC has posted nothing beyond May 20, 2023.
Presentations,          AMC            THEATRES               INVESTOR           RELATIONS,
https://investor.amctheatres.com/financial-performance/presentations/default.aspx (last
visited June 7, 2023). 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.
22
          Presentations,       AMC         THEATRES        INVESTOR          RELATIONS,
https://investor.amctheatres.com/financial-performance/presentations/default.aspx (last
visited June 7, 2023).
23
     See DiGiacobbe, 743 A.2d at 184.

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         10.     The Court’s conclusions on the First Exceptions that Mr. Affholter

lacks standing to move this Court for relief, and could have but did not submit his

concerns about notice as an objection, apply to the Second Exceptions.

         11.     The Court agrees with the May 30 Report’s conclusion that because

Mr. Affholter clearly received timely electronic notice of the settlement, as

evidenced by his numerous filings with this Court, his “individual interest in

having additional notice through a post card falls short of providing good cause, or

any reason, to adjourn the settlement hearing.”24

         12.     Mr. Affholter’s Second Exceptions are DENIED.

         13.     In a filing earlier this morning, Mr. Affholter pointed to text in earlier

filings stating that he “reserve[d] his right” to file a late objection after the May 31

deadline depending on how his motions were adjudicated.25 He also confirms he

has not filed his objection.26 I repeat to Mr. Affholter what every other AMC

stockholder who has contacted the Court has been told: he is free to submit his

untimely objection, but there is no guarantee it will be considered.

         Leibovitz Exceptions

         14.     I ask Mr. Leibovitz to consider this order as he drafts his submission

in support of his exceptions. He is not a party and does not have standing to seek

24
     D.I. 365 at 8.
25
     D.I. 435 at 2 (quoting D.I. 345 ¶ 13).
26
     D.I. 435 at 4.

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relief from this Court. His concerns about the timing of postcard notice are of no

legal import because he clearly received timely electronic notice of these

proceedings;27 his concerns about notice broadly are properly submitted as an

objection; and he cannot speak for other stockholders. His stated concerns about

the adequacy of lead counsel would also be proper fodder for an objection.

         Mathew Submission

         15.    The Mathew Submission purports to speak to whether Mr. Affholter

had actual notice of the settlement, and to support Mr. Affholter’s request for

relief. Like Mr. Affholter and Mr. Leibovitz before him, Mr. Mathew cannot

speak for another AMC stockholder.28

                                       /s/ Morgan T. Zurn
                                   Vice Chancellor Morgan T. Zurn

27
     D.I. 259; D.I. 343.
28
 Mr. Mathew has acknowledged that he is not a lawyer. D.I. 198 ¶ 6 (“Additionally,
Mr. Mathew has some legal experience, being a L1 [sic] in Law School . . . .”).

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