AMC Entertainment announced on Friday that they have been approved for new financial proposals by the Delaware Chancery Court. The company’s CEO, Adam Aron, has been open about “the risk of a cash crunch and even bankruptcy if it wasn’t able to secure financing in a still uncertain box office climate,” as stated by Deadline. The issue started due to the COVID-19 pandemic, and the company wasn’t able to fully recover even after theaters opened again – until now.

But, what made this difficult was the split investor ownership of the company, where millions of shareholders didn’t want their piece of the company lessened. Therefore, AMC itself was running out of money fast. Their solution was AMC Preferred Equity, known as APE units, in an attempt to sell them for further revenue. This scenario failed, and APEs eventually lost all value. 

To fix this, AMC attempted to switch APEs back to regular stock units. Many of the shareholders agreed in March that this was the best plan. But there were a few who didn’t like this idea and sued. AMC was taken to Delaware Chancery Court. Those who sued had eventually come up with a settlement with AMC, but the case’s judge rejected the settlement. 

On Friday, the court ruled that the March financial proposals are approved based on the initial shareholder vote that took place. In an email sent to shareholders, Aron shared the steps the company is taking and what it means for the company. According to Aron, AMC will be more resilient by fixing the problem of APE units being worth significantly less than AMC shares, having a better balance sheet over time, having a more simplified ownership, and by having more opportunities to transform AMC in the future as times change. 

Aron ends his email by saying, “I close with this over-arching thought. Knowing that we can do our best for AMC to smartly raise capital is a terrific relief. And when one sees the recent success of our movie theaters in attracting millions and millions of guests to watch world-class storytelling, it is easy to understand why I am ever so excited about the opportunities for AMC that lie ahead.”