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In a nutshell failing to seek purchasers consent is wrong and was deemed to be a breach of the ordinary course covenant.
Seeking is not an empty formality and consent should have be sought - even if it states in any contract that it shall not be unreasonably with-held. (Our Arrangement Agreement does contain similar wordings)
It's inclusion is there to protect the purchaser against the seller acting in it's own interests and affords the purchaser the right to enquire further, query things and it can also then allow them to impose conditions with any consent.
If consent is not forthcoming then proper way to go about things is litigation. You simply cannot just blank the provision because it states "consent shall not be unreasonably withheld".
Might be relevant today
dyor.
The Issue of Consent from the AB Stable ruling I mentioned.
Direct lift from what is a 242 page judgement.
Those following the case will be familiar with constant reference points throughout to the issue of gaining consent.
4. Seller’s Argument About Buyer Consent
Finally, Seller suggested in a footnote in its reply brief that any deviation from the
ordinary course of business could not constitute a breach of the Ordinary Course Covenant
because that provision permitted deviations if Buyer consented and further provided that
Buyer’s consent “shall not be unreasonably withheld.” Dkt. 472 at 51 n.34 (citing SA
§ 5.1(a)). During post-trial argument, Seller’s counsel returned to this argument at
somewhat greater length. See Dkt. 481 at 116. Seller admitted that it never sought Buyer’s
consent, but argued that if it had, then Buyer could not reasonably have withheld its
consent. According to Seller, consent therefore should be deemed given, meaning that
Seller did not breach the Ordinary Course Covenant.
Compliance with a notice requirement is not an empty formality. Notice to the buyer
is a prerequisite because it permits the buyer to engage in discussions with the seller and if
warranted, seek information about the situation under its access and information rights.
The buyer then can protect its interests. For example, it can propose reasonable conditions
to its consent, and it can anticipate and account for the implications of the non-ordinarycourse actions when planning for post-closing operations.
Seller did not cite any authority to support its Buyer-would-have-been-obligated-toconsent theory, much less any case involving an ordinary course covenant. Vast bodies of
188
case law, commentary, and scholarship address the giving of notice in other contexts. The
parties did not cite or discuss any of these authorities.
Absent authority suggesting a different outcome, the most logical reading of the
Ordinary Course Covenant is that Seller was required to seek Buyer’s consent before taking
action outside of the ordinary course. If Seller asked, and if Buyer refused, then Seller
could litigate the reasonableness of Buyer’s refusal. Seller admitted that it did not seek
Buyer’s consent under Section 5.1 until April 2, 2020, after it had already made major
operational changes.281
Seller waived this argument by not presenting it in a meaningful fashion. The notion
that Buyer might have been obligated to consent if asked does not provide grounds to
excuse the breach of the Ordinary Course Covenant.
Dyor, as always
I think maybe after yesterdays court case people or institutions are maybe starting to realise that certain people at Cineplex were well aware that they should have obtained Cineworld's consent for the Queensway deal and they didn't. It's in the contractual Arrangement Agreement that consent had to be sought. It makes for an interesting days proceedings today.
Mr Steep and McCarthy Tetraut are imho doing an exemplary job of proving up the Cineworld case. Find the 3 main principles from the ruling of the Delaware Courts in the case of AB Stable and particularly the ruling on Consent and then you might understand things better.
Several more weeks left yet till closing submissions and then it will be for the judge to retire and make her detailed decision. Given these can amount to many pages it won't be done overnight.
Far better to be concentrating on the new Bond film in the UK, Europe and the US in the interim as well as Marvel Carnage.
Nice one, I like my watches so you can sort me out with one when this gets back to £1+ haha.
Markets all green again today hoping for 68p+ by end of day
Plumber95 Jeweller.
What do you work as PW?
Sorry PW, I wasn’t watching it at that time, but I am watching it now. Mr Steep being very straightforward and trying to extract the facts from the witness. Our counsel looks very well prepared and professional.
Plumber95 haha I've just wrote a bloody essay saying I'm dyslexic in English writing then I've just spotted my mistake haha. "County Case"
Ant, I know what your laughing at now haha.
Plumber95 yes Tui up a little bit finally, I flipped a coin this morning, heads sell it, tails keep it, so I left it to the universe to decide, as I'm crap at this share business. Even the 200 (thingy) told me to sell, and now signed up to the barchart haha. its been a long day! (exciting business one though :-)
I've missed a bit of the court case from 5.30 till now, just watched the last 5 min. It's back on in an hour. I really needed to get out and do some walking.
Latpulldown might of been watch it? X
I was counting on Mountainous haha
Yes Wild awkward chat with his boss plus the "lol" messages from Monday referring to his CEO. But if the witnesses aren't allowed to watch this then his boss won't have seen that as he's a witness too? Or would all the documents submitted to the court been made available to them also?
PW
Is there a new County case I've missed today??
Or was that a slip of the finger after such a hard day's work !!
At least Tui was up a little today, and CINE rose after close!!
Is there a week off from court next week?
PW - that’s what I’d hoped, bring a bit of lightness to our investment chat xxx apparently cineplex ceo next, I’ve tuned out for a bit.
Today’s court case is seeming very juicy indeed, I had something come up in the afternoon and I’m not able to watch right now :/
Quickly tuned in and saw a different person for Cineplex counsel? Are they trying someone else due to the poor performance of their company in court so far?
Haha BlueBuxton I can't believe he still has a job after that.
KickThePuss he is awful isn't he, very aggressive in his emails. Not a nice human at all. They are passing the buck aswell... Saying I don't deal with that so I would not know.
Yes KickThePuss (I laugh every time I write your name lol)
Plus they wanted 50million to end their lease agreement, plus the free rent and to build another Cineplex in another complex the land owner owns .... So was that the 21 million they got in exchange? (which the owner agreed to. (which states in Cineworld agreement they could not change any business agreements, they were buying the lease agreements in those locations so......... So they won't be purchasing what they thought they were. Breech of contract!!! Simple.
PW - I think the point our guy was making was that cineplex renegotiated many leases totalling many millions of $’ without cineworlds approval as per the agreement, same for the rights to the development land worth 20m $’ that was swapped for a 6 month rent holiday, again without cineworld approval…..that’s my take anyway, may have got the wrong end of the stick.
The cineplex guy is not a pleasant human, if he’s deemed “worthy” and a value add to the cineplex case I’m encouraged.
It’s court and anything can happen, still got everything crossed.
I was hoping you'd be tuned in for that message Wild :-) Uncomfortable viewing watching the VP 4 Real Estates seeing he had written that lol
Sorry that ment to say...
Cineplex won't honour "other agreements" but everyone else has to honour theirs..... Oh and this was in the middle of the pandemic!
So our Cine guy, was just going through all Cineplex emails that they would not honour their discounted 33% rent of paying lease agreements, when they said they would. Cineplex were going to take everyone to court haha
So aggressive, I would hate to be working with them.
Basically Cineplex called one of the lease agreements owners "P ricks" lol.
Nearly all corospoding emails are headed saying lease agreed (they were not) Cineplex were being aggressive to lease agreements owners, threatened with court proceedings lol.
In one of the lease agreements they have "the site had a height restrictions" the lease owner was in agreement building tall condo on the land, Cineplex were going to take them to court lol, as it was in their agreement. June 2020
Basically its OK for Cineplex to honour their agreements...... (but Cineworld)