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I’ve not seen any court action today but Cineplex is down 3.5% on a day we are slightly up. No idea if it’s related to the case but hope it is.
Evening all, any comments from the court case today? Hope we’re all having a great day.
Find yourself the 3 key legal points established in the Delaware Courts ruling of AB. Stable and you might understand how we appear to be doing in this court case. Canadian Courts generally pay high regard to Delaware Court rulings and normally cite them in their own courts. Realise also that this was the first aborted takeover judgement coinciding with the pandemic and in the main on those 3 legal points backed the Purchasers right to walk away from that takeover agreement. There is a fair way to go yet in establishing all the facts but bad faith intimations by the seller in respect of the purchaser are also looking thin imho.
Another week closer to The James Bond UK Premiere on the 28th Sept and its opening weekend in the UK on the 30th Sept.
I think the witnesses (except the expert witnesses) are not permitted to follow the court proceedings. Mooky was given permission to give direction to Steep when required but still excluded generally.
Yes as I understood it Mountain as Mooky is advising Cine's lawyer (Paul Steep) but is also being called as a witness himself Mr Steep requested the Judge's permission for Mooky to be able to hear the other witnesses - correct me if I'm wrong anyone?!
Thank you HNS and Bombdog for your replies, I didn’t watch the first day of the proceedings so I was not aware Mooky was named in as a witness.
Will be interesting to see how things play out. Have a fantastic weekend.
mountainous - Mooky was specifically named as a witness on the first day
I feel going how they have to pay Regal and how they made sure they pulled out of the deal when Cineplex breached the terms. They will not accept a settlement that is not in their favour. E.g. cineplex pays Cineworld’s cost at a minimum. IMO
I would expect to see Nisan but perhaps not Mooky given the level of detail being scrutinised
My own personal theory and pure speculation is that perhaps Mooky or Ellis won’t show as they are still negotiating in parallel to this court case around settlement - given they put forward $700m minimum compensation from the opening statement eg I think Cineplex are going for $400-$500m eg roughly half to sod off and as this goes on perhaps they will further revise down to a much lower figure in light of the lack of progress they are making in showing any convincing argument.
Just a quick question, now that we’ve seen Cineplex’s CFO in, what is the likelihood of seeing Mooky or Nisan? I would assume it’s highly likely we’ll see Nisan at some point at least, seeing as he is the CFO of our company?
I think that the point of law will revolve around Cine agreed to buy a business for $X.
There were a bunch of covenants set out that ensured that what Cine agreed to buy was in fact what it ended up buying.
If it can be shown that Cineplex breached those covenants so that if the deal completed, the business that Cine acquired was not as agreed, then it is able to withdraw without penalty.
Many of the lines of argument advanced seem to try to suggest that Cine delayed so that the above was the case, but I am unaware of any clause that compelled Cine to try to do otherwise.
In fact I think it is beholden in Cineplex's management to ensure that the business that they were selling was as described, and at the moment, that doesn't look the case.
My summary of today’s action
Cine lawyer landed some very strong points on CFO:
That the decision of March 2nd to defer payments was way in advance of knowing impact of covid and that no mention of this as a material issue to exec team
That deferring to additional 60 days was actually a major departure from normal behaviour - I think he mentioned hadn’t happened in 20-30 years so departure from ordinary course
That they were aware of the lack of benefit from govt assistance around support on rent/ leases yet this wasn’t fully explained in response to Cine enquires therefore suggesting they were concealing the true picture in relation to ability to meet lease obligations
On the cross against the legal exec for cineplex he managed to make her concede that the agreement did not bind Cine in the way it was being suggested around obligations - won’t go into the details of this as I am bound to misquote but related to the undertakings associated with the Investment Canada portion of the agreement
All in all a well argued defence for what I think is an opportunistic and grubby case being perused by Cineplex
NHS_77 you are spot on!
This court case is becoming more of a joke as it goes on …and I am watching this in disbelief at the arguments being advanced - of so let me clarify the arguments (as I understand them) from the latest witness
There is a tunnel vision testimony that seeks to portray Cine as frustrating the process from the legal standpoint without taking account the wider context around the state of the business and it’s debt position but more then this if the judge takes a rational view of this
If Cine had completed the transaction what exactly was the expected outcome? a default by Cine on day one on debt secured to buy the business due to neither business generating revenue to cover operating costs resulting in the likely permanent loss of jobs for 1000s of Cineworld, Regal and Cineplex workers as well as knock on effects to partner suppliers, landlords etc - but the likely vast enrichment of Cineplex board and shareholders- what a great outcome!
Now I understand that isn’t the point of law being argued but it underlines the broader point around the debt ceiling that this transaction simply wasn’t viable and both parties could / should have respectfully called it off or paused until conditions to pick up were forthcoming rather then forcing this ridiculous case