Pre-Effective Amendment to Registration of Securities — Form S-2
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-2/A Pre-Effective Amendment to Registration of 123 740K
Securities
2: EX-1 Exhibit 1.1 40 118K
3: EX-3 Exhibit 3.1 5 31K
4: EX-3 Exhibit 3.2 24 82K
5: EX-3 Exhibit 3.3 16 32K
6: EX-5 Exhibit 5.1 2 12K
7: EX-7 Exhibit 7.1 2 15K
8: EX-10 Exhibit 10.37 9 43K
9: EX-23 Exhibit 23.1 1 7K
10: EX-23 Exhibit 23.2 1 7K
EX-7 — Exhibit 7.1
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EXHIBIT 7.1
Richards, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
(302) 658-6541
February 18, 1994
AMC Entertainment Inc.
106 West 14th Street
Kansas City, Missouri 64105
Ladies and Gentlemen:
We have acted as special Delaware counsel to AMC Entertainment, Inc., a
Delaware corporation (the "Company"), in connection with the registration by the
Company on Form S-2 of 4,600,000 Shares of its Convertible Preferred Stock, par
value $.66 2/3 per share (the "Convertible Preferred Stock"). In this
connection, you have requested our opinion as to whether there will exist any
restriction upon the surplus of the Company available for the payment of
dividends on stock of the Company by reason of the fact that the liquidation
preference of the Convertible Preferred Stock will exceed the par value of such
stock, and whether any remedy would be available to the holders of the
Convertible Preferred Stock before or after payment of any dividend that would
reduce or reduces the surplus of the Company to an amount less than the amount
of such excess.
For the purpose of rendering our opinion as expressed herein, and only for
such purpose, we have examined and have relied upon the following documents:
(i) the Restated and Amended Certificate of Incorporation of the Company
(the "Restated Certificate") to be filed with the Secretary of State of the
State of Delaware (the "Secretary") pursuant to Section 245 of the General
Corporation Law of the State of Delaware (the "General Corporation Law");
(ii) the proposed Certificate of Designations with respect to the
Convertible Preferred Stock (the "Certificate of Designations"); and
(iii) the Registration Statement on Form S-2 with respect to the Convertible
Preferred Stock (the "Registration Statement") as filed with the Securities and
Exchange Commission (the "Commission").
With respect to the foregoing documents, we have assumed: (i) the
authenticity of all documents submitted to us as originals, the conformity with
authentic original documents of all documents submitted to us as copies or
forms, the genuineness of all signatures and the legal capacity of natural
persons, and (ii) that the foregoing documents, in the forms thereof submitted
for our review have not been and will not be altered, amended or repealed in any
respect material to our opinion as stated herein. We have not reviewed any
documents other than the documents listed above for purposes of rendering our
opinion as expressed herein, and we assume that there exists no provision of any
such other document that bears upon or is inconsistent with our opinion as
expressed herein. We have conducted no independent factual investigation of our
own but rather have relied solely upon the foregoing documents, the statements
and information set forth therein and the additional matters recited or assumed
herein, all of which we assume to be true, complete and accurate in all material
respects.
In summary, Section 4 of the Certificate of Designations provides that in
the event of any liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary, the holders of record of the Convertible Preferred
Stock are entitled to receive out of the assets of the Company available for
distribution to its stockholders, whether from capital, surplus or earnings,
before any distribution or payment will be
made to the holders of Common Stock or any other class of capital stock of the
Company ranking upon liquidation junior to the Convertible Preferred Stock,
$25.00 per share, plus an amount equal to accrued but unpaid dividends thereon,
if any (the "Liquidation Preference").
Section 170 of the General Corporation Law authorizes a Delaware corporation
to pay dividends out of its surplus. Surplus is defined by Section 154 of the
General Corporation Law as the amount by which the net assets of a corporation
exceed its capital. Both net assets, as defined in Section 154, and capital, as
defined in and determined in accordance with Sections 154 and 244 of the General
Corporation Law, are determined without reference to the amount of any
liquidation preference of any class of the corporation's stock. Accordingly, the
authorization in Section 170 of the General Corporation Law for payment of
dividends out of surplus is not in any way limited or restricted solely by
reason of the fact that a series or class of stock of a corporation, such as the
Convertible Preferred Stock, has a liquidation preference in excess of the par
value of the stock.
We are aware of no controlling decision of any court of the State of
Delaware that addresses the question presented for our consideration, but we
believe that our courts would adopt the reasoning set forth herein should the
question be litigated. We note in addition that our opinion as stated herein is
supported by the discussion of the Court in BAILEY V. TUBIZE RAYON CORPORATION,
56 F. Supp. 418, 423 (D. Del. 1944) (applying Delaware law).
Based upon and subject to the foregoing, and subject to the limitations
stated hereinbelow, it is our opinion that, solely as a matter of law, under the
General Corporation Law as in effect on the date hereof: (1) prior to a
liquidation, dissolution or winding up of the affairs of the Company, there will
be no restriction upon the surplus of the Company available for the payment of
dividends on stock of the Company solely by reason of the fact that the
Liquidation Preference exceeds the par value of the Convertible Preferred Stock;
and (2) no remedy would be available to holders of the Convertible Preferred
Stock either before or after payment of any dividend, prior to a liquidation,
dissolution or winding up of the affairs of the Company, solely by reason of the
fact that payment of such dividend would reduce or reduces the surplus of the
Company to an amount less than the difference between the Liquidation Preference
and the par value of the Convertible Preferred Stock.
The foregoing opinion is limited to the General Corporation Law, and we have
not considered and express no opinion on the effect of any other laws or the
laws of any other state or jurisdiction, including federal laws regulating
securities or other federal laws, or the rules and regulations of stock
exchanges or of any other regulatory body.
We hereby consent to the use and filing of this opinion as an exhibit to the
Registration Statement provided, however, that in giving such consent we do not
admit that we come within the category of persons whose consent is required
under Section 7 of the Securities Act of 1933 or the Rules and Regulations of
the Commission thereunder. Except as provided for hereinabove, without our prior
written consent, this opinion may not be furnished or quoted to, or relied upon
by, any other person or entity for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger
GPW/CSB/mbw
Dates Referenced Herein and Documents Incorporated by Reference
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