Two investors in AMC Entertainment Holdings Inc are suing hedge fund Antara Capital LP, which holds roughly 30% of the company’s controversial APE preferred units, for the return of alleged short-swing profits, according to a report by Bloomberg.
Two investors in AMC Entertainment Holdings Inc are suing hedge fund Antara Capital LP, which holds roughly 30% of the company’s controversial APE preferred units, for the return of alleged short-swing profits, according to a report by Bloomberg.
The lawsuit, filed in a Manhattan federal court accuses Antara, its affiliates, and founder Himanshu Gulati, of making more than $20 million on sales of APE units and AMC common stock purchased less than six months earlier. Under federal securities laws aimed at preventing insider trading, corporate leaders and major stockholders are required to give such short-swing profits back to the company.
The APE units have been the subject of fierce litigation in Delaware’s Chancery Court since February over a plan to convert them to Class A shares. A hearing in that case is set for late June.
The investors leading the new case meanwhile, Dennis Donoghue and Mark Rubenstein, have said they may amend their roughly $20 million damages request as they learn more details about the trades they’re targeting.
