The settlement purported to release not only claims tied to the common stock, but also claims associated with preferred interests that common stockholders might also hold, and 'the release cannot properly extend to those latter claims.' It also purports to release claims that don't arise from the same factual predicate, she ruled. To cut to the chase, the settlement cannot be approved as submitted.'

'Even moving quickly, the Court must ensure that the proposed settlement is fair and fulfills the principles of due process. 'Citing AMC’s financial situation, the parties have sought to present their settlement for approval on a compressed timeframe,' Vice Chancellor Morgan Zurn wrote in her opinion.

That marks a surprising win for the company's 'Ape army' of meme-stock holders.ĭelaware law provides that its Court of Chancery review all class-action settlements. Massimo Giachetti/iStock Editorial via Getty ImagesĪMC Entertainment ( NYSE: AMC) vaulted 75% after hours Friday, and as much as 100% - and AMC Preferred Equity units ( APE) nosedived as much as 63% - on word that a settlement paving the way for a share conversion was rejected by a Delaware court.

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