AMC Entertainment Holdings Inc (NYSE:AMC) shares are trading higher Tuesday. The stock appears to be bouncing back after tanking Monday as the company received court approval for its revised stock conversion plan.

What You Need To Know: AMC proposed a settlement with shareholders in early April to allow for the conversion of AMC Preferred Equity Units (NYSE:APE) into common shares. The proposed plan also included a one-for-ten reverse stock split.

The court rejected the settlement at the end of July, noting that it could not be approved as submitted. AMC then sent in a revised settlement. At the end of last week, the court approved AMC's revised stock conversion plan.

According to a regulatory filing, the reverse stock split will take place on Aug. 24. APE units will be converted to common stock the following day, increasing the total number of authorized shares of AMC's Class A common stock from approximately 524.2 million to 550 million.

In a letter to shareholders, AMC CEO Adam Aron said the company "can use this access to equity capital to shore up our cash reserves, pay down debt, invest in growth initiatives to strengthen our operating profitability and pursue transformative merger and acquisition opportunities."

While AMC shares faced heavy selling pressure on Monday, APE units got a lift from the news. AMC shares are down approximately 15% year-to-date, while APE units are up more than 48%. 

Check This Out: AMC Shares Tank On APE Conversion Plans: Analysts, Jim Cramer And More Say It's 'A Clearer Path For AMC To Survive'

AMC Price Action: AMC shares were up 2.64% at $3.48 at the time of publication, according to Benzinga Pro.

Photo: Dave Dugdale from Flickr.