Delaware's highest court has upheld the stock conversion plan of AMC Entertainment Holdings Inc. (AMC) on Wednesday, allowing the company to proceed with its conversion of AMC Preferred Equity units (APE units), according to reports.

Chief Justice Collins J. Seitz Jr. signed a court order affirming a prior ruling that grants AMC the ability to convert its shares into APE units. The stock conversion plan was initially declared by AMC in 2022 as a way to bypass share limits and raise capital without seeking approval from shareholders.

However, AMC shareholders voiced concerns about potential dilution from the conversion and raised objections to the move. In response, AMC proposed a settlement in 2023 that would allow for the conversion of APE units into common shares, along with a one-for-ten reverse stock split. After several deliberations, the Chancery Court ultimately approved the revised stock conversion plan.

Delaware's highest court recently upheld the ruling in a one-page order, stating, "After careful consideration of the parties' briefs and the record below, and following oral argument, we find it evident that the judgment of the Court of Chancery should be affirmed on the basis of and for the reasons stated in the Memorandum Opinion and Order dated August 11, 2023."

AMC's stock has experienced significant volatility in recent weeks due to a resurgence of interest in meme stocks. The market fluctuations were triggered by the return of Keith Gill, also known as "Roaring Kitty," a trader whose social media presence played a key role in the meme stock frenzy of 2021.

Following a surge in AMC shares last week, the company entered into agreements to issue stock in exchange for notes. Additionally, AMC recently announced that it raised around $250 million in new equity capital through the sale of 72.5 million shares from an offering launched in March.

AMC's annual shareholder meeting is scheduled to take place on June 5. The outcome of the court's decision and the stock conversion plan will likely be discussed during the meeting.

Investors and market observers will closely monitor AMC's actions and the ongoing volatility in meme stocks as they navigate the evolving landscape of the financial markets.