TORONTO, Sept. 28,
2022 /CNW/ - (TSX: CGX) - Cineplex Inc.
("Cineplex" or the "Company") provides an update to
stakeholders with respect to its claim against Cineworld Group plc
("Cineworld"). As previously discussed in Cineplex's news
release issued on September 7, 2022,
Cineworld and certain of its subsidiaries commenced bankruptcy
proceedings in the United States
(collectively the "Cineworld Bankruptcy Proceedings"), and
took the position that Cineplex's claim against Cineworld was
stayed pursuant to the Cineworld Bankruptcy Proceedings. Today,
Cineplex sought an order from the United States Bankruptcy Court
for the Southern District of Texas
(the "US Court") to modify the automatic stay of proceedings
pursuant to the Cineworld Bankruptcy Proceedings to permit
Cineplex's claim to proceed in the Canadian courts. The US Court
did not grant Cineplex's requested relief at this time, without
prejudice to Cineplex's ability to seek such relief at a later
date.
As previously discussed in further detail in the Company's
publicly filed materials, on December 14,
2021, the Ontario Superior Court of Justice (the
"Ontario Court") released
its decision in the action commenced by Cineplex against Cineworld
(the "Ontario Decision"). The Ontario Court held that Cineplex did not
breach any of its covenants in an arrangement agreement between
Cineplex and Cineworld dated December 15,
2019 (the "Arrangement Agreement"), and that
Cineworld had no basis for terminating the Arrangement Agreement.
The Ontario Court held that
Cineworld breached the Arrangement Agreement and repudiated the
transaction to acquire Cineplex. The Ontario Court awarded damages for breach of
contract to Cineplex in the amount of $1.24
billion CDN on account of lost synergies, and $5.5 million CDN for transaction costs, exclusive
of prejudgment interest. The Ontario Court also denied Cineworld's
counterclaim against Cineplex. On January 12, 2022, Cineworld filed a Notice of
Appeal with the Ontario Court of
Appeal and on January 27, 2022,
Cineplex filed its Notice of Cross Appeal. The hearing in respect
of the Cineworld's Appeal and Cineplex's Cross Appeal is scheduled
for October 12 and 13, 2022.
Given Cineplex's requested relief to lift the stay of proceedings
was not granted by the US Court at this time, the hearing before
the Ontario Court of Appeal will
not proceed as scheduled.
The stay of proceedings in the Cineworld Bankruptcy Proceedings
does not impact the merits or quantum of Cineplex's claim, and
Cineplex continues to have its claim against Cineworld. While
the judgment against Cineworld and next steps are a key focus for
Cineplex and its advisors, due to the Cineworld Bankruptcy
Proceedings, it is not possible for Cineplex to predict the timing
or final outcome of Cineplex's judgment against Cineworld, or
whether Cineworld will have the ability to satisfy Cineplex's
claim. Cineplex will continue to explore all avenues and
forms of consideration to satisfy its judgment.
About Cineplex
Cineplex (TSX:CGX) is a top-tier Canadian brand that operates in
the Film Entertainment and Content, Amusement and Leisure, and
Media sectors. Cineplex offers a unique escape from the everyday to
millions of guests through its circuit of over 170 movie theatres
and location-based entertainment venues. In addition to being
Canada's largest and most
innovative film exhibitor, the company operates Canada's favourite destination for 'Eats &
Entertainment' (The Rec Room) and complexes specially designed for
teens and families (Playdium). It also operates successful
businesses in digital commerce (CineplexStore.com), alternative
programming (Cineplex Events), cinema media (Cineplex Media),
digital place-based media (Cineplex Digital Media) and amusement
solutions (Player One Amusement Group). Providing even more value
for its guests, Cineplex is a partner in Scene+, Canada's largest entertainment and lifestyle
loyalty program.
Proudly recognized as having one of the country's Most Admired
Corporate Cultures, Cineplex employs over 10,000 people in its
offices and venues across Canada
and the United States. To learn
more, visit Cineplex.com.
Caution Regarding Forward-Looking
Statements
Certain information included in this news release contains
forward-looking statements within the meaning of applicable
securities laws. These forward-looking statements include, among
others, statements with respect to Cineplex's objectives, goals and
strategies to achieve those objectives and goals, as well as
statements with respect to Cineplex's beliefs, plans, objectives,
expectations, anticipations, estimates and intentions. The words
"may", "will", "could", "should", "would", "suspect", "outlook",
"believe", "plan", "anticipate", "estimate", "expect", "intend",
"forecast", "objective" and "continue" (or the negative thereof),
and words and expressions of similar import, are intended to
identify forward-looking statements.
By their very nature, forward-looking statements involve
inherent risks and uncertainties, including those described in
Cineplex's Annual Information Form ("AIF"), its MD&A for the
year ended December 31, 2021 and for
the six months ended June 30, 2022
(collectively, the "MD&A"). Those risks and uncertainties, both
general and specific, give rise to the possibility that
predictions, forecasts, projections and other forward-looking
statements will not be achieved. Certain material factors or
assumptions are applied in making forward-looking statements and
actual results may differ materially from those expressed or
implied in such statements. Cineplex cautions readers not to place
undue reliance on these statements, as a number of important
factors, many of which are beyond Cineplex's control, could cause
actual results to differ materially from the beliefs, plans,
objectives, expectations, anticipations, estimates and intentions
expressed in such forward-looking statements. These factors
include, but are not limited to, the duration and impact of the
COVID-19 pandemic on Cineplex, the movie exhibition industry and
the economy in general, as well as Cineplex's response to the
COVID-19 pandemic as it relates to the closure of its theatres and
location-based entertainment venues, employee reductions and other
cost-cutting initiatives, and increased expenses relating to safety
measures taken at its facilities to protect the health and
well-being of customers and employees; Cineplex's expectations with
respect to liquidity and capital expenditures, including its
ability to meet its ongoing capital, operating and other
obligations, and anticipated needs for, and sources of, funds;
Cineplex's ability to execute cost-cutting and revenue enhancement
initiatives in response to the COVID-19 pandemic; and risks
generally encountered in the relevant industry, competition,
customer, legal, taxation and accounting matters; the outcome of
any litigation surrounding the termination of the Cineworld
transaction; and diversion of management time on litigation related
to the Cineworld transaction. The foregoing list of factors that
may affect future results is not exhaustive. When reviewing
Cineplex's forward-looking statements, readers should carefully
consider the foregoing factors and other uncertainties and
potential events. Additional information about factors that may
cause actual results to differ materially from expectations and
about material factors or assumptions applied in making
forward-looking statements may be found in the "Risks and
Uncertainties" section of Cineplex's MD&A.
Cineplex does not undertake to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by applicable
Canadian securities law. Additionally, we undertake no obligation
to comment on analyses, expectations or statements made by third
parties in respect of Cineplex, its financial or operating results
or its securities. All forward-looking statements in this news
release are made as of the date hereof and are qualified by these
cautionary statements. Additional information, including Cineplex's
AIF and MD&A, can be found on SEDAR at www.sedar.com.
SOURCE Cineplex