Bloomberg Law

"A pension fund and an AMC Entertainment Holdings Inc. investor defended on Wednesday a settlement they negotiated with the cinema chain so it could proceed with a stock conversion opposed by its meme stock base.

One of those retail traders, Rose Izzo, is asking the Delaware Supreme Court to reverse the settlement approved in August 2023 by a lower court. She alleges the pension fund and the individual investor colluded with AMC to dilute meme stock investors in the conversion of preferred equity units into common stock.

Izzo seeks to reverse a conversion that’s already happened, with roughly 7 million settlement shares issued to resolve the litigation, said Gregory Varallo of Bernstein Litowitz, representing the Allegheny County Employees’ Retirement System and investor Anthony Franchi.

But she offers no plan for how the Court of Chancery could undo the conversion and move forward with a plan that would give Izzo and other objectors the opportunity to opt out so they could pursue their claims, Varallo told the high court.

“The lower court exercised its discretion fully conscious of the impracticability and perhaps impossibility of the relief sought,” he said.

Izzo’s attorney, Anthony Rickey of Margrave Law LLC, argued the conversion has left some shareholders destitute, and reversing the order approving the settlement would offer them hope for recovery “from the defendants who wronged them.”

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