Item 3. Legal Proceedings
Item 3. Legal Proceedings.
On May 4, 2023, the Company filed a lawsuit in the Superior Court of the State of Delaware against seventeen insurers participating in its directors & officers insurance program, seeking recovery for losses incurred in connection with its defense and settlement of In re AMC Entertainment Holdings, Inc. Stockholder Litigation No. 2023-0215-MTZ (Del. Ch.), including the settlement payment. The insurance recovery action is captioned AMC Entertainment Holdings, Inc. v. XL Specialty Insurance Co., et al. , Case No. N23C-05-045 AML CCLD (Del. Super. May 4, 2023) (the “Coverage Action”). In the suit, AMC seeks up to $80 million in coverage under its Executive and Corporate Securities Liability Insurance Policies sold by the defendants, which provide coverage for the policy period of January 1, 2022 through January 1, 2023 (the “Policies”) in excess of a $10 million deductible. The primary insurer in the Coverage Action has paid its full $5.0 million limit. The Company has previously reached confidential settlement agreements with all but one insurer in the Coverage Action.
The remaining insurer contested whether it owed coverage for the settlement payment, claiming it does not constitute a “Loss” under its insurance policy (the “Loss Defense”). On February 28, 2025, the court denied a motion for summary judgment by the remaining insurer in the Coverage Action. Additionally, the court partially granted the Company’s motion for summary judgment, ruling that the settlement payment constituted a covered loss, but that genuine issues of material fact existed for trial regarding whether AMC complied with the consent provisions of the Policies in connection with the settlement payment (the “Consent Defense”). Subsequently, pursuant to a joint stipulated order entered by the court on March 9, 2025, the remaining insurer withdrew its Consent Defense (but preserved its Loss Defense for appeal) and on April 9, 2025, the court entered a final judgment in favor of the Company in the amount of $5.0 million plus pre-judgment interest of $0.7 million. On May 8, 2025, the insurer filed a notice of appeal to the Supreme Court of the State of Delaware. On December 9, 2025, the Supreme Court of the State of Delaware affirmed the Superior Court’s decision in favor of the Company. Shortly thereafter, the remaining insurer paid the Company its full limits, plus pre- and post-judgment interest.
AMC also has claims for coverage from additional insurers, however, those insurers’ policies contain mandatory arbitration provisions, so they were not included in the Coverage Action. On January 24, 2025, the Company sent a notice of arbitration to the four remaining insurers with mandatory arbitration provisions on the same grounds as the Coverage Action (the “Coverage Arbitration”).
On October 31, 2025, a purported securities class action captioned Simons v. AMC Entertainment Holdings, Inc. , No. 1:25-cv-09042-JLR, was filed by a purported former holder of AMC Preferred Equity Units against the Company in the United States District Court for the Southern District of New York. The complaint asserts a claim under Section 10(b) of the Securities Exchange Act of 1934 based on allegedly false and misleading public statements and omissions by the Company during the period from August 18, 2022 to November 1, 2023 concerning the conversion of the AMC Preferred Equity Units. The complaint alleges damages of at least $178 million, plus pre-judgment interest. The Company intends to defend the action vigorously.
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On December 5, 2025, an action captioned Masoner v. AMC Entertainment Holdings, Inc. et al., No. N25C-12-022 was filed by two purported AMC stockholders against the Company, Adam Aron, and unspecified members of the Company’s board of directors in the Superior Court of the State of Delaware. The complaint asserts claims for, among other things, fraud, fraud on the court, breach of fiduciary duty, unjust enrichment, and conspiracy based on the 2023 settlement of the action captioned In re AMC Entertainment Holdings, Inc. Stockholder Litigation No. 2023-0215-MTZ (Del. Ch.). Plaintiffs seek, among other things, monetary damages of approximately $4.2 million, disgorgement of approximately $18 million, declaratory relief, equitable relief, and injunctive relief. Defendants intend to defend the action vigorously.
Item 4. Mine Safety Disclosures.
Not applicable
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PART II