A Delaware class action filed June 23, 2026 by investor Christopher Garabedian against 5&2 Studios, the company behind The Chosen. It challenges a March 2026 reverse stock split that cashed out about 16,000 small crowdfunding investors at $3.75 per share.
The complaint says the cash price was below fair value, that management projections were set too low, and that the company's leaders were on both sides of the deal. These are allegations that have not been decided by a court.
Jenkins, the show's co founder and executive chairman, said any suggestion of impropriety is categorically false and that the company is eager for the court's review.
The complaint names 5&2 Studios, Inc. as the only defendant. Jenkins is described in it as a director the plaintiff calls conflicted, but he is not listed as a defendant.
No. This is an open lawsuit, not a settlement. There is no claim form and no payout deadline at this time.
The Chosen is one of the most successful crowdfunded shows ever made, and thousands of fans helped pay for it by buying shares. In 2026 those small investors were cashed out. Now one of them is suing, and Dallas Jenkins has publicly answered the claims. This guide explains what the lawsuit says, what the company says back, and what the case could mean for the people who were bought out.
Everything below comes from the court filing, SEC documents and news coverage. The claims are the plaintiff’s allegations, and the company denies wrongdoing. For background on how group cases work, see our guide to what a class action lawsuit is.
Important
This is a pending lawsuit, not a settlement. No court has decided who is right. If you were a Series B investor in the show, you may want to speak with a securities lawyer or contact plaintiff’s counsel before taking any action.
The case is Garabedian v. 5&2 Studios, Inc., C.A. No. 2026-0821-NAC, filed June 23, 2026 in the Delaware Court of Chancery. The plaintiff, Christopher Garabedian, invested $300,000 in 2019 and held 150,000 Series B shares. He sues for himself and on behalf of a putative class of former stockholders. The full complaint is public.
At the center is a reverse stock split that closed on March 30, 2026. Under it, every investor holding fewer than roughly 173,500 shares was paid cash instead of keeping stock. According to the Salt Lake Tribune, that removed more than 16,000 minority stockholders. The complaint says they held about 45 percent of the company’s economic interest.
A reverse stock split combines many old shares into one new share. When the ratio is huge, small holders end up with less than one whole share and the company pays them cash instead. That is how the company reduced the number of record holders. Its Schedule 13E-3 filed with the SEC on December 31, 2025 said the goal was to bring the number of record holders below 300 so it could stop reporting to the SEC.
According to the complaint, the split was approved at a shareholder vote on March 30, 2026, the day after Palm Sunday and during Holy Week. It alleges nearly 80 percent of Series B holders did not vote and that a controlling holder with about 92 percent of the voting power carried the result.
The complaint brings one count, under Section 155(2) of the Delaware General Corporation Law, which deals with paying fair value for fractional shares. It says $3.75 was not fair value. The main allegations are listed below, and each is the plaintiff’s claim, not a finding.
The plaintiff received about $560,250 for his stake. As reported by WORLD, the case argues that small investors lost the benefit of future income from streaming distribution, spinoffs and related products.
Jenkins, who is co founder and executive chairman of 5&2 Studios, addressed the suit publicly. Reported by the Deseret News and the Salt Lake Tribune, he said any suggestion of impropriety is “categorically false.” He said the company has been transparent and accountable since it was formed, has followed all legal and financial requirements, and is eager for the court’s review.
Because the case is active, he said he could not say much more, but he chose not to answer with “no comment.” The complaint names only the company as defendant, so Jenkins is not individually sued in this filing.
What each side says.
The plaintiff says $3.75 per share was far below fair value and the process was unfair. The company says the transaction was handled properly and denies any impropriety.
According to the schedule posted by plaintiff’s counsel, the company’s motion to dismiss was due August 28, 2026, and the plaintiff’s opposition was expected by October 14, 2026. A judge will then decide whether the case moves forward. Class actions in Delaware Chancery can take a year or more, and a court must certify the class before it can proceed for everyone. Check the court docket or the law firm page for the latest filing.
If you are looking for open payouts instead, browse our guide to find class action settlements you qualify for or see the full list of lawsuits we track.
Court: Delaware Court of Chancery
Case number: C.A. No. 2026-0821-NAC
Filed: June 23, 2026
Claim: 8 Del. C. Section 155(2), fair value for fractional shares
Reference: complaint
It is a Delaware class action filed in June 2026 by investor Christopher Garabedian against 5&2 Studios, the company behind The Chosen. It challenges a reverse stock split that cashed out about 16,000 small investors at $3.75 per share.
Christopher Garabedian, who invested $300,000 in 2019 and held 150,000 Series B shares, is the named plaintiff. He sued on behalf of a proposed class of former stockholders.
The complaint names 5&2 Studios, Inc. as the only defendant. Jenkins is mentioned as a director the plaintiff calls conflicted, but he is not listed as a defendant.
He called any suggestion of impropriety categorically false, said the company has been transparent and has followed all legal and financial requirements, and said it is eager for the court's review.
It combines many shares into one. When the ratio is very large, small holders end up with a fraction of a share and are paid cash instead, which removes them as stockholders.
The cash price was $3.75 per pre split share. The plaintiff says that is far below fair value and points to earlier valuations and bids that were much higher.
No. The case is still pending and there is no settlement, claim form or deadline. If one is reached, an official notice will explain how to participate.
Class members are generally included automatically if the court certifies a class, unless they opt out. Contact plaintiff's counsel or a lawyer to ask how it applies to you.
In the Delaware Court of Chancery, which handles corporate disputes, under C.A. No. 2026-0821-NAC.
The company was due to move to dismiss by August 28, 2026, and the plaintiff's response was expected by October 14, 2026. A judge then decides whether the case continues.
Not as far as the public record shows. The allegations have not been proven, and the company denies wrongdoing.
According to its SEC filing, to reduce holders of record below 300 so it could stop SEC reporting. The complaint says the reporting burden was about $3.7 million a year.