AMC Entertainment : Report And Recommendation Of Special Master Regarding Jordan Affholter’s Motion For Enlargement Of Time And Objection To The Discovery Process

EFiled: May 25 2023 06:18PM EDT

Transaction ID 70089417

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 JORDAN AFFHOLTER'S MOTION FOR ENLARGEMENT

OF TIME AND OBJECTION TO THE DISCOVERY PROCESS

PRICKETT, JONES & ELLIOTT, P.A.

Corinne Elise Amato (#4982)

1310 N. King Street

Wilmington, Delaware 19801

[phone]

Special Master

Dated: May 25, 2023

PRELIMINARY STATEMENT

Jordan Affholter ("Affholter") first wrote to the Court on April 8, 2023, in a

letter docketed on April 17, 2023, raising concerns with the proposed settlement of

this action.1 Since then Affholter has moved to intervene, sought access to discovery

and made other requests of the Court.2 I recommended that the Court deny some of

those requests.3

On May 19, 2023, I recommended that objectors to the proposed settlement

be permitted access to the existing discovery record, conditioned on providing proof

of AMC Entertainment Holdings, Inc. ("AMC") stock ownership and execution of

a confidentiality agreement.4 The Court adopted that recommendation.5 Defendants

have since made the discovery record available to potential objectors subject to

compliance with proof of ownership and confidentiality requirements.6

Affholter has not satisfied the preconditions to access the existing discovery

record, and it is not clear whether Affholter ever will. For example, on May 22,

Affholter filed a Motion for Enlargement of Time and Objection to Discovery

1. Trans. ID 69835190.
2. Trans. IDs 69875639, 69990687, 69958472, 69941676.
3. Trans. IDs 70033944, 70051660.
4. Trans. ID 70051000.
5. Trans. IDs 70053696, 70073710.
6. Defendants' Opposition to Jordan Affholter's Request to Extend the Deadline to Submit Objections ¶ 4 (Trans. ID 70078952) ("Defendants' Opposition").

Process (the "Motion to Enlarge"),7 in which Affholter describes the confidentiality

restrictions as "unnecessarily restrictive and constitutionally offensive."8 Because

Affholter refused to execute Exhibit B to the confidentiality order, Affholter does

not have access to the existing discovery record.9

In the Motion to Enlarge, Affholter seeks additional time to object to the

settlement, citing, in part, concerns regarding the length of time it could take to

review the discovery record before the objection deadline passes.10 Affholter also

seeks additional time to submit the In-Person Settlement Objector Interest Form11

that an objector must complete in order to speak at the settlement hearing.12

1. Trans. ID 70062036. Affholter did not paginate his filing. The substance of the correspondence begins on page 3 of the .PDF, which I consider page 1.
2. Motion to Enlarge at 8. Affholter also requested "equitable" revisions to defendants' proposed form of confidentiality order, modifications to the stock ownership verification process to place the burden to verify ownership on AMC rather than individual stockholders, and that the Court vacate paragraph 8 of the confidentiality order. See id. The Court denied those requests on May 24, 2023. Trans. ID 70073710.
3. See Plaintiffs' Opposition to Jordan Affholter's Motion to Modify the Scheduling Order ¶ 12 n.4 (Trans. ID 70081610) ("Plaintiffs' Opposition").
4. Motion to Enlarge at 5.
5. Id. at 9.
6. The Court appointed me as a Special Master in this action. See Order Appointing Special Master ¶ 1 (Trans. ID 69885808); Letter to Counsel & Interested Parties from Vice Chancellor Zurn, dated May 2, 2023, Regarding Special Master's Authority (Trans. ID 69935078). A recommendation concerning these requests falls within the scope of my authority.

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For the reasons set forth below, I recommend that the Court deny Affholter's request to enlarge the time period for submitting objections because Affholter has not demonstrated good cause for the request. I further recommend that the Court grant Affholter's request that the Court accept in-person attendance objection forms postmarked up to and including the date of the objection deadline, currently May 31, 2023.

ANALYSIS AND RECOMMENDATION

1. Recommendation to Deny Request to Amend Objection Deadline According to the Scheduling Order with Respect to Notice and Settlement

Hearing ("Scheduling Order"), objections to the settlement are due no later than May 31, 2023.13 Affholter seeks to extend this deadline for three reasons. First, Affholter cites a technical issue that certain stockholders received an "email bounce notification" from the email domain that plaintiffs' counsel set up to receive objections.14 Second, Affholter notes that the exhibits cited in plaintiffs' settlement brief were initially filed confidentially pursuant to Court of Chancery Rule 5.1.15 Third, Affholter raises concerns about the time needed to review the discovery

1. Scheduling Order ¶ 18 (Trans. ID 69929995).
2. Motion to Enlarge at 3.
3. Id. at 4-5.

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record, including his belief that the digital platform was not accessible at the time

ordered by the Court.16

The Scheduling Order permits extensions of deadlines for good cause

shown.17 Good cause may be found where "the moving party has been generally

diligent, the need for more time [is] neither foreseeable nor its fault, and refusing to

grant the continuance would create a substantial risk of unfairness to that party."18

Affholter's first concern-the email bounce notification-does not provide a

basis to enlarge the time period for objections. This technical issue was promptly

resolved and did not affect plaintiffs' counsel's receipt of any emails.19 It did not

cause any delay or prejudice to any potential objector, much less any delay that

would provide good cause to permit additional time for Affholter, or any other

stockholder, to submit an objection.

1. Id. at 6-7. Defendants have represented that the digital platform was operational by the time ordered by the Court. Defendants' Opposition ¶ 4.
2. Scheduling Order ¶¶ 18, 25. Court of Chancery Rule 6(b) likewise requires good cause to modify an existing deadline.
3. Coleman v. PricewaterhouseCoopers, LLC, 902 A.2d 1102, 1107 (Del. 2006).
4. Trans. ID 70044521. The Court has ordered that only a stockholder's first objection will be considered. See May 3, 2023 Corrected Settlement Procedure Letter at 2 (Trans. ID 69944998) (the "Settlement Procedure Letter"). Because plaintiffs' counsel received all objections, any affected stockholders need not submit a further objection.

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