Well, Adam Aaron and AMC are being sued I Know that is an absolutely insane thing to say. Some of you watching this are going to be thinking, why would you possibly cover this? Why would you talk about it? Why are you spreading fun? You're against us. What's going on? How much does Citadel pay you and then some of you are watching this and thinking good down with him. He screwed us over.

How many times do we have to line his pocket? The fact that there's so many different types of people watching this makes me feel like the absolute best thing we can do is just stick to fact. Whatever emotional state you're in. clicking on this video Understand: we're just here to cover the story. I'm not telling you which way to feel I'm not telling you which way to vote.

In all reality, it's up to you. You're an adult, you're able to do your own research, and that's what we're here to do. We're simply here to dive in to the truth, the facts of what's currently going on with them being sued, and what I really mean by that is a class action request for the ape March conversion vote. So we're even going to be getting into what in the world does that mean? But please leave your emotions at the door.

I Know half of you watching this. it's fine. You can't cover this and the other half of you are gonna be like good. This guy absolutely deserves it.

Let's get him into handcuffs I Understand that I Get it's going both ways I Know that there's a lot of emotion in it, but I beg of you for the mindset of this particular video, let's stick to fact. This story is hot off the presses as of February 21st AMC faces class action requests to delay March ape conversion vote For those of you who are interested in researching my research, here's the transaction: ID the case number and obviously this is all going down in the Court of Chancery of the state of Delaware and it is the Allegheny County Employees Retirement System versus AMC entertainment and everything else. The legal jargon associated with that I Want to get into the main details of what this class action request is really all about. Obviously, there's going to be some details that we don't have time to get into.

so I will link this PDF in the description of the video and I do implore all of you to check it out. The Allegheny County Employees Retirement System aka the plaintiff brings this verified class action complaint seeking injunctive and Equitable relief aka the complaint against AMC and members of AMC's Board of Directors for violations of the Delaware General Corporation law. This the Dgcl that acronym is going to be important so please remember that in breaches of fiduciary duty, the allegations of the complaint are based on the knowledge of plaintiff as to itself and on information and belief including based on the investigation of counsel and review a publicly available information as to all other matters. So what you really need to know from that is the fact that hey, it's this Allegheny County Employee Retirement Fund Whatever it is they own AMC They're not happy with what's been going on with AMC In terms of the board's decisions, they think there's been some funky business, so they're trying to get a court system to actually look into it.

And more specifically, here's exactly what they're calling out. This action challenges a course of complex and disloyal corporate engineering by the defendants described by AMC CEO and chairman Adam Aaron as an exercise in quote unquote 3D chess devised to achieve a simple aim eviscerating the voting power of a AMC's Class A stockholders in order to force through approval of a proposed dilutive Share account increase that those stockholders repeatedly had rebuffed and were not willing to support at the corporate. Ballot Box You probably already know a decent amount of this if you've been following the AMC story over the past two years, But for those of you who maybe forgot a little bit or maybe you're a little bit newer to the story, here's a very quick recap: AMC Proposed on multiple occasions to amend Companies certificate of Incorporation to authorize the issuance of additional shares of class A common stock, but those proposals were Duff repeatedly by the company's existing class A comma stockholders who twice forced the withdrawal of such proposals so to kind of step back a little bit from legalese. Basically, AMC is like saying hey, we need some money, let us sell more stock to the market to hopefully build up our war chest and maybe take care of some debt issues.

maybe to do some M A mergers and Acquisitions Basically they were saying we need more money, but people who are interested in this squeeze, we're saying no, no, no, we don't want you to dilute the stock because when Supply goes up price generally Falls So they were saying, well, we're in this for a squeeze, We don't want you to be selling more stock as we're trying to get things to squeeze. That was seemingly the mindset of the two different groups of what was going on, and that's exactly why they ended up having to pull the proposal because they knew there wasn't going to be enough votes so it wasn't like it technically got voted on in the negative. they proposed it. Then there was an internet backlash and they pulled the proposal as an AMC did before there was ever such a vote.

And it makes sense because people didn't want the stock price to drop, especially if they already owned it, because why would they want to lose money AMC Embarked on a course of complex corporate engineering for the plain and obvious purpose of circumventing the will of the company's existing stockholders and securing a dilutive increase in the number of authorized Class A shares over their unambiguous opposition. To summarize this and please remember: I'm not a lawyer I Don't speak legalese, but to the best of my interpretation, what this is really saying is the shareholders didn't want something to happen AKA dilution and the board who's supposed to be representing the shareholders circumvented them and figured out a way that they could get dilution if you happen to be reading this document. there are other useful I would say interesting things to know in here, but I would argue that it really starts to heat up On page four and five, AMC announced that had entered into a multi-step agreement allowing a single investor and Tara to obtain 257 million Apes representing almost 28 of all outstanding Apes at an average cost of 66 cents per share. The agreement with Anterra also required AMC to propose an increase in the number of authorized shares of class A common stock, a conversion of all the existing Apes in the class A from one for one Basin and a subsequent 10 for One reverse stock split of the Class A shares and Tara also signed a voting agreement to support those proposals.

That's what's being propose and inherently, that's what they're asking to kind of pause right now. the entire thing is already a done deal, but the whole reverse merger. The 10 for One reverse stock split. that type of stuff.

That's the proposal that they're trying to pause right now. The interesting thing here truly is the deal with Interra. As you're about to see, they got in at the low low prices and it was all an orchestrated deal that made them a ton of money. If you look into their filings, which you can find all over the Internet, they've been wheeling and dealing options.

They've been making money hand over fist on this deal. It's actually pretty disgusting. But anyway, they're making a lot of money, but they control a lot of the vote to the point that they might be able to influence the current vote that we are talking about. Following the entire deals announcement, the trading price of Apes skyrocketed and the trading price of class A stock precipitously declined.

This is because of Arbitrage The way this was all structured was ape, and AMC had the same legal and financial claim to the company, so they should be priced roughly the same. They were trading at a pretty large discrepancy. In fact, as I'm filming this, they're still trading at a pretty large discrepancy. But the fact that it seemed as if this deal was going to come through the Arbitrage Traders were saying great, Let's long Ape and let's short AMC Because in a theoretical sense, they should have the same value so they're just playing that difference.

They don't really care where the prices meet. It could be right in the middle. It could be higher. It could be lower.

They are just looking for that Delta the difference between the two AMC and Ape to meet somewhere. and they're looking to play that difference which is a common trading tactic. The market realized the inevitable that the proposals would be approved, resulting in a massive transfer of value from the company's Class A stockholders to its new ape investors AMC had stacked the deck to ensure that result. So basically saying it was far better.

The way the deal is playing out to be in Ape relative to AMC, It's almost as if the AMC investors, you know, the people who saved the company multiple times over were paying the tab for this kind of wonky ape deal. Following the September 2022 Ape sales and the entire deal, there were more than 929 million of the company's new Apes outstanding as compared to just 517 million of class A common stock. And as Apes have consistently traded at a significant discount to class A shares. The holders of Apes were strongly incentivized to approve the proposal to ensure a massive value transfer from Amsey's existing Class A socks holders to its new ape holders.

AMC has taken steps to supercharge the voting power of Apes as a class compared to class A Comstock Specifically, in its deposit agreement with Computershare AMC included a provision requiring Computer Share a depository for the preferred stock too. and this is absolutely wild, so please listen up. You might have to listen to this a couple times in the absence of Specific Instructions from holders of Apes vote, the preferred stock represents by Apes of such holders proportionately with votes cast pursuant of instructions received from holders. Now I Know that's a little bit wonky, so let's get into a better example of what that even means: if the holders of just three Apes cast votes on a corporate proposal, say two in favor and one against Computer Share will cast votes for all of the nearly 1 billion outstanding.

Apes Two-thirds in favor and one-third against regardless of the numbers of votes actually cast. So it's applying everything proportionately, which when you put this in connection with what's going on within. Tara It really seems to be putting the foot on the scales in this particular scenario. With that being said, there are other things going on in here, but that's pretty much the major things you need to know of this class action ask of pausing the vote.

But as we go through, there are a couple things that I do think it's important for me to point out to all of you as you keep going through. this is 42 Pages It's talking quite a bit about kind of the social engineering that Adam Aaron has pulled off. but really I think just to kind kind of keep emotions out of it because to me, that's not necessarily a legal thing I Want to stick to more of the cold hard facts of this situation and the next thing is going to be right here on page 27. the board makes a deal with Interra to eviscerate the voting controlled the company's Class A stockholders and to ensure an increase in the total authorized share of class a common stock.

So basically in here this is all of their evidence or what they deem to be evidence of anterior getting a very very nice sweet art deal and benefiting financially a lot on it. And then if you come down to page 30, the creation and issuance of the preferred stock adversely affected the rights and powers of Class A stockholders yet was not submitted to a vote of the Class A stockholders in accordance with the Dgcl. So we talked about this a little bit. but once again just to kind of remind everyone what's going on here, the argument here and all the information under it is explaining how when AMC first went through its Charter ordeal, preferred stock did not have voting power.

It didn't That's just how it was made. and then all of a sudden with the creation of Vape and releasing it into the wild, they have the exact same voting power and what this is arguing here and I'm not saying it's right, I'm not saying it's wrong. Remember I'm not a lawyer just trying to cover what's going on in this particular story. They're arguing that according to the Dgcl you can't do that you can't have preferred stock that has no voting power and then all of a sudden out of nowhere, just be like, okay, yeah, I know cool, you guys can vote And then we're seeing that they're definitely taking advantage of it because they made a lot more stocks so they take up more percentage of the pie and Tara is signing on saying they're going to vote whichever way AMC really wants them to vote And then all of a sudden we're in the scenario where ape comes back in AMC They can delude it however they want whenever they want, which is exactly what the shareholders didn't want multiple times before.

or another way to put that defense: disloyal adoption of the depository voting requirement is contrary to the principles of fairness and stockholder democracy. At this point, you might be wondering what's the actual legal mumbo jumbo that AMC Adam Aaron and the rest of the board are being hit with? Well, it's actually two different counts: number one breach, a fiduciary duty against the director defendants, and we also have count two violation of Dgcl Section 242b declaratory judgment of invalidity as to the preferred stock. And now that we got the Tldr out of the way, it's time for my thoughts and opinions before we get into that I Want you to know once again just because I Feel like it's that important to remind everyone of I'm not a lawyer I Don't speak legalese I'm doing my best to interpret with this new class action request is all about, but it doesn't seem too good if you're a lawyer. If you know more about law, I Would love to get your thoughts on a comment below of maybe these types of things happen all the time and they just don't carry weight I could totally see that or May maybe if you're a lawyer, you know a lawyer and you see things like this, you can be like no, it's actually pretty serious I can't fairly speak to the severity of it I Don't think this type of press is good press, but just from a legal standpoint, it could be very severe or it literally might be nothing.

So if maybe you have a little bit more info on that, please let me know in a comment below. But overall I Want to let you guys know my high level thoughts: I Think this plaintiff has a good point just solely on the basis of shareholders of AMC The people who have saved this company multiple times over did not want the stock to loot. It was that simple, they were going to make it a proposal. It was met with massive backlash I Lived through the entire thing and then they pulled the proposal ape.

Was never something that was gonna cause the Ftds to be shown or screw over the shorts or any of that. It was a very, very roundabout way to allow them to dilute the stock and the way I view it is pretty much if your shareholders don't want you to do something and then you find a complex way to pull that thing off and in the meantime, line your own. Pockets Don't forget AMC Board Leadership has sold over 100 million dollars worth of AMC over the past year year and a half Adam Aaron himself, the guy who was allegedly so excited about this company, so confident in its future and so it sold over 40 million dollars worth of AMC recently himself, the guy running the company and I Get it, you shouldn't be looking into someone else's Pockets But when that other person is the person who you're investing in and then they're selling out the thing that they're investing in, it's just a really, really bad Vibe And when you're doing that seemingly whether this is reality or not, but it does seem this way. when you're going against what shareholders have wanted in the past now, you might be watching this and be like hey, I agree with that, but my opinions have changed opinions.

thoughts do change iterate over time. I Totally understand that. that's totally acceptable I Think everyone you should be a little bit more malleable as new information comes in once again. I'm not making this video telling you which way to vote.

If you're watching this and you're like yes, I'm voting yes, this is the best thing. It'll save the company. Go ahead vote. Yes If you think this is awful and Adam Aaron has stabbed you in the back, vote no this.

You're an adult. This is your vote. If you own shares, it is your vote. You shouldn't be just blindly following another person.

My main thought here is I have no idea about the severity. This might be nothing that you brush away or this could be pretty serious. So when we get the decision from the judge of if things are going to be positive, I'll make an update video. but as of now I would love to get your thoughts below of where is the community at on: Adam Aaron and I'm not saying this in a biased way one way or the other.

I truly want to know because I think that's what this is all about I Think this is all worked out because the community has come together and please remember Adam Aaron isn't the leader of the community. There's no leaders of the community, but if there was one one, it wouldn't be a suit. it would just be us as a collective. It's retail just trying to finally once in life, get ahead just a little bit.

It's not a suit. Remember, you trust the suit as far as you can throw them like let's let's not forget that fact. But overall I think there's sometimes what Adam has done what he wants to happen which is a personal benefit to him, can also align with what we want. But then there's certain things that what he wants and what might personally benefit him might not be best for the people who saved his own company multiple times over.

So with that being said and really not the most eloquent way to say it I Want your thoughts I know at one point in time he was on a pedestal. Everyone loved him. Same thing happened with Ryan Cohen but it seems as if now there's cracks in the foundation, so I'll leave with you with that. I'll read all your comments below and I'll catch you in the next video.

Have a good one.