AMC Entertainment : Report And Recommendation Of Special Master Regarding Requests To Intervene

EFiled: May 26 2023 05:47PM EDT

Transaction ID 70051174

Case No. 2023-0215-MTZ

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	)

REPORT AND RECOMMENDATION OF SPECIAL

MASTER REGARDING REQUESTS TO INTERVENE

PRICKETT, JONES & ELLIOTT, P.A.

Corinne Elise Amato (#4982)

1310 N. King Street

Wilmington, Delaware 19801

[phone]

Special Master

Dated: May 26, 2023

PRELIMINARY STATEMENT

This report and recommendation addresses various requests to intervene that have been made since the entry of the Scheduling Order With Respect to Notice and Settlement Hearing (the "Scheduling Order").1 I recommend that these requests, and any other requests to intervene made in advance of the settlement hearing, be denied without prejudice. I view this as the most efficient path forward and consistent with the procedure contemplated by the Scheduling Order.

ANALYSIS AND RECOMMENDATION

On April 27, 2023, the parties filed a Stipulation and Agreement of Compromise, Settlement, and Release ("Stipulation").2 The following day, the Court asked the parties to advise as to their position on how entering into the Stipulation and entry of the agreed-upon stay of further litigation applied to pending motions to intervene and any future motions to intervene.3 The Court then entered the Scheduling Order on May 1, 2023. On May 3, 2023, the parties proposed that

1. any motions to intervene pending prior to entry of the Scheduling Order be resolved notwithstanding the stay and (ii) any motions to intervene filed after entry

1. Trans. ID 69929995.
2. Trans. ID 69906464. Because the Court has issued opinions and I have issued reports and recommendations in this matter, I presume familiarity with the general nature of this dispute.
3. Trans. ID 69917463.

of the Scheduling Order be stayed pending the Court's hearing as to the fairness of

the proposed settlement.4

On May 15 and 17, 2023, I addressed the motions to intervene that were

pending prior to entry of the Scheduling Order and recommended that the Court deny

requests to intervene by A. Mathew and Jordan Affholter because they did not (i)

file the requisite complaint in intervention pursuant to Court of Chancery Rule 24(c)

or (ii) otherwise satisfy Rules 24(a) or (b).5 I also found that A. Mathew and Jordan

Affholter raised concerns that are, at this stage, better addressed in objections to the

proposed settlement.6

Several purported class members have sought to intervene in this action since

the entry of the Scheduling Order. None of these requests cite or comply with Court

of Chancery Rule 24.7 Rather, purported class members have submitted requests to

1. Trans. ID 69948706.
2. Report and Recommendation of Special Master Regarding A. Mathew's Motion to Intervene at 4-6 (Trans. ID 70017448) ("Mathew Report"); Report and Recommendation of Special Master Regarding Jordan Affholter's Motion to Intervene at 5-8 (Trans. ID 70033944) ("Affholter Report").
3. Mathew Report at 5-6; Affholter Report at 5-8.
4. Many of these requests seek access to the existing discovery record but that issue is moot. Trans. IDs 70051000, 70053696.

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intervene in the form of correspondence raising objections or "formal objections" to

the settlement (collectively, the "Requests to Intervene").8

I recommend that the Requests to Intervene and any similar requests be denied

without prejudice. They raise objections to the proposed settlement that the Court

will consider in deciding whether or not to approve it, and the settlement hearing is

a more appropriate forum for class members to raise their concerns. It is also more

efficient to address objections to the proposed settlement at the settlement hearing

than permit various class members to intervene in the interim.9 If the Court approves

the proposed settlement, the requests to intervene will be moot. If the Court rejects

1. See, e.g., Frank Maribito's May 5, 2023 correspondence (Trans. ID 69965734); James VanWinkle's May 9, 2023 correspondence (Trans. ID 69983408); Edward Flounoy Jr.'s May 9, 2023, correspondence (Trans. ID 69981326); Amie Toerge's May 10, 2023 correspondence (Ex. 1); Darling Arauz's May 10, 2023 correspondence (Ex. 2); Floretta Shirley's May 12, 2023 correspondence (Ex. 3); Stanley Ancheta's May 12, 2023 correspondence (Ex. 4); Keng Yu Chen's May 17, 2023 correspondence (Ex. 5); Frank LaSalvia III's May 18, 2023 correspondence (Ex. 6); Joel Pacuancuan's May 19, 2023 correspondence (Ex. 7); Clark Yao's May 19, 2023 correspondence (Ex. 7); Ariel Edu's undated correspondence (Ex. 8); Jafrius Martinez's undated correspondence (Ex. 9); Lourdes Edora's undated correspondence (Ex. 10). These exhibits do not include the corresponding proof of beneficial ownership.
2. In re TD Banknorth, 938 A.2d 654, 662 (Del. Ch. 2007) (describing the "orderly procedure of requiring an intervenor to voice its concerns at the settlement hearing"); see also In re Home Shopping Network, Inc. S'holder Litig., 1994 WL 560801, at *1 (Del. Ch. Oct. 4, 1994) (deferring ruling on motion to intervene until settlement hearing); see also Mathew Report at 5-6; Affholter Report at 5-8.

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the proposed settlement, stockholders may seek to intervene, if appropriate, in a

manner consistent with Delaware law.

CONCLUSION

For the reasons set forth herein, I recommend that the Court DENY the

Requests to Intervene and any other requests to intervene made in advance of the

settlement hearing without prejudice.
Dated: May 26, 2023	PRICKETT, JONES & ELLIOTT, P.A.
	/s/ Corinne Elise Amato
	Corinne Elise Amato (Bar No. 4982)
	1310 N. King Street
	Wilmington, Delaware 19801
	[phone]
	Special Master

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