Shareholders of AMC Entertainment (NYSE:AMC) stock and AMC Entertainment Preferred Equity Units (NYSE:APE) have been embroiled in the lawsuit deciding the conversion of APE into AMC. Now, though, AMC has received another lawsuit.
Yesterday, an AMC shareholder sued the movie theater chain, claiming that it had not held an annual meeting of shareholders for over 13 months. The shareholder also alleges that two of AMC’s directors have been appointed by the company without shareholder approval. The directors in question are Denise Clark and Keri Putnam.
Reuters notes that Delaware law stipulates that shareholders may sue a company if they have not held an annual meeting during the last 13 months. AMC’s last annual meeting was held on June 16, 2022 and the plaintiff has asked Delaware’s Chancery Court to require AMC to hold the meeting by Aug. 18. In 2020, Delaware’s top appeals court ruled that courts can deny shareholder meeting requests only for “exceptional reasons.”
AMC Stock: Shareholder Sues to Hold Annual Meeting by Aug. 18
The complaint notes that the plaintiff emailed AMC’s investor relations on or about June 16, 2023. He received a reply on or about June 20 stating that AMC’s 2023 annual meeting date was not yet “finalized.” Since then, “AMC has failed to provide written notice of any meeting as required by the Bylaws.” The plaintiff also brings up AMC’s “suboptimal governance” and highlights cases of litigation brought up by shareholders in the past.
The plaintiff ultimately requests three items from the court. The first is for the court to order AMC to hold an annual meeting by Aug. 18, with a date of record as the same date as the complaint (which was filed on July 17). The plaintiff’s second request is for the court to require AMC to hold an election for its Class III directors “and any other AMC Board of Directors vacancies.” Finally, the plaintiff’s last request is for the court to grant him any other relief that is reasonable and appropriate, such as lawyer fees.
Shares of AMC stock and APE have remained resilient today. Shareholders seem to be largely shrugging off the lawsuit based on current price action.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
