Lawsuit filed by AMC investors against Antara Capital over short-swing APE profits.

Antara Capital LP, holding a significant stake of approximately 30% in AMC Entertainment Holdings Inc.'s controversial APE preferred units, is now facing a federal securities lawsuit demanding the return of alleged short-swing profits.

The legal action, initiated by two AMC investors, accuses the hedge fund, its affiliates, and founder Himanshu Gulati of generating profits exceeding $20 million from the sale of APE units and AMC common stock acquired less than six months prior. These transactions fall under the purview of federal securities laws, which require corporate leaders and major shareholders to relinquish short-swing profits to prevent insider trading.

Filed in the federal court in Manhattan, this lawsuit introduces a fresh legal battle in the ongoing contentious situation surrounding APE units. These units have been at the center of intense litigation in Delaware's Chancery Court since February.

On Tuesday, the securities lawsuit was lodged in the US District Court for the Southern District of New York. Dennis Donoghue and Mark Rubenstein, the lead investors in the case, have indicated their willingness to adjust their damages request of approximately $20 million as they gather further details concerning the targeted trades.

The shareholders are represented by David Lopez, based in Southampton, N.Y., and Miriam Tauber, based in New York.

Case Details: Donoghue v. Antara Cap. Master Fund LP, S.D.N.Y., No. 23-cv-4985, complaint filed 6/13/23.