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Update 3:30pm: Adds judge signs order setting date.
AMC Entertainment (NYSE:AMC) jumped 23% after a Delaware judge agreed to hold preliminary injunction hearing in late April to block the conversion of AMC Preferred Equity units – (APE) – into common shares. APE preferred equity units fell 6.9%.
The injunction hearing is set for April 27. The March 14 vote on the conversion of the shares will be allowed to take place, according to a court filing signed by Vice Chancellor Morgan T. Zurn of the Delaware Court of Chancery. The hearing originally set for March 10 was canceled.
“Defendants shall not amend AMC’s certificate of incorporation as a result of any vote of shares at AMC’s March 14, 2023 special meeting (or any adjournment thereof), pending a ruling by the Court on Plaintiffs’ to-be-filed preliminary injunction motion,” the court filing said.
The injunction hearing comes as The Allegheny County Employees’ Retirement System last week filed a class-action complaint in Delaware’s Court of Chancery against AMC and its board members, including CEO Adam Aron, seeking a temporary restraining order against a planned March 14 conversion vote.
The plaintiffs accuse AMC and its board with violating Delaware General Corporation Law and breaching fiduciary duties.
AMC (AMC) short interest is 23%.
AMC’s setting of March 14 for the vote to convert the preferred units into common shares (and reverse split the stock) led to a spike in company common shares late last month.
AMC (AMC) is set to report Q4 results after the close on Tuesday.