AMC shareholder sues to force company to hold annual meeting
1:30 pm Monday, July 17th, 2023
(Reuters) – An AMC Entertainment Holdings Inc. shareholder sued the theater chain in Delaware court on Monday, saying AMC is late in holding its annual meeting where shareholders elect members of the company’s board.
Individual shareholder Kevin Barnes said in the lawsuit that AMC is required by its corporate bylaws to hold a meeting each year, and that its last annual meeting was on June 16, 2022. He asked the Delaware Chancery Court to require AMC to hold its next annual meeting by Aug. 18.
An AMC spokesperson did not immediately reply to requests for comment on Monday.
Delaware law protects shareholders’ right to attend annual meetings, and gives them the right to sue if a meeting has not been held in the last 13 months.
The state’s top appeals court ruled in 2020 that courts can deny requests for a shareholder meeting only when there are “exceptional reasons”.
Barnes said in the lawsuit that two of the company’s nine-member board of directors were appointed by the company without a shareholder election.
He accused AMC of “suboptimal governance,” that has led to “frequent litigation” by AMC shareholders, including a lawsuit where holders of AMC common stock sued to block a stock conversion plan.
A Delaware judge is currently considering a proposed settlement in that lawsuit which would allow the stock conversion to go forward.
At the last annual meeting, shareholders voted against AMC’s proposed executive compensation including that of top boss Adam Aron.The case is Barnes v. AMC Entertainment Holdings Inc., No. 2023-0718, in the Delaware Court of Chancery.
(Reporting by Jody Godoy in New York; editing by David Evans)
