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I hope the new judge on appeal date also holds cine world shares lol
If they hold cineplex share then no chance we will win the appeal lol .
Wonder how many shares of cineplex Barbara have !!!
@mountainuous , nice to know that you live in West Yorkshire as I too live there.
I just can’t see a complete wipeout in Canada
I think any significant reduction is a win. A complete wipeout of the $1.23bn is a huge win.
$200-300m should be relatively ok for CINE to pay, so I would classify that as a win.
Institutions are usually a mixed bag. Most of the money aiming at covid recovery stocks are probably already in these stocks, RR, CCL, Airlines, etc..
There is also a bona fide bloodbath on the stock market, meaning the risk appetite may not be too high for the investors. I will aso presume some of them are down significantly from holding Blue chip/tech stocks that hit the gutter these past few months.
Mount what do actually mean by win ? Completely wiping the 1.2 bil off, or the judges, reduceing it to say 2-300 million ?
@FunInvestor, apologies for missing the question.
It may appear to some that CINE will emerge from this alive no matter the outcome, I also partially share that opinion. I think that their relationship with lenders is fantastic, and there is huge incentive for lenders to keep this alive. Considering that CINE is now back and operating, a negative appeal from CPX should be the last that CINE asks from their lenders if required and they should be good going forward.
That being said, there is still a material uncertainty there, as the company has stated themselves. Nobody knows for sure if they’re going to win, nobody knows for sure if they are going to get the money they need if they lose either, so this is pure lottery. If we win the appeal or achieve an affordable out of court settlement, then we’ve hit the jackpot.
Past Cineplex, there is nothing else about this company that concerns me. The debt will reduce in due course, and if CINE need to do an equity raise at a higher price to accelerate deleveraging, then that is fine with me as I will be at significant profit by that point and I would be happy to take up my rights in such an event.
That is my opinion. I’m sure if you asked many other investors in other companies about CINE they’d tell you to avoid at all costs, there was actually someone on the RR board telling someone that the company is likely going to pot, it’s a similar thing in many places.
All about making your own personal investment choice and calculating your risk tolerance accordingly, which you already appear to have done thoroughly FunInvestor :)
All in my opinion.
Totally agree, i will listen to opinions on the case but won't get too involved.
1) I can add very little
2) I don't velveteen it's as one sided as some think it is.
If the judgement is well over the top , justice will hopefully serve in a substantial reduced sum
Mountainous, Yes my belief is various areas of uncertainty in the business, not least Cineplex appeal. What I was ask though was for those here that believe eve there is no result that has Cineworld lose essentially then why is SP here and why are institutional buyers not filling up like fat kid in sweetie shop?
It doesn't add up if that were indeed the case. Let's nobody here think they know far better than teams of experts in finance/investing/legal matters
@Fun, simply it’s all the uncertainty in my opinion. Mooky’s complete silence on the issue is causing a lot of uncertainty.
If an RNS came out tomorrow saying CINE would have sufficient liquidity to pay no matter the result of the appeal, then this sp would skyrocket, even if CINE didn’t mention what form that liquidity would be in, the reason being that all the uncertainly is mostly gone in that case.
And then at that point, the sp would rise according to how the box office is doing and how we anticipate it to do. All well and good having a fantastic box office, but it is meaningless if CINE goes bankrupt due to a failed appeal, so that is the current mindset of the market towards CINE in my opinion.
One of my problems with the assertion that with regards the Cineplex dispute and appeal we essentially can't lose comes back to then why is share price at c. 10% of pre COVID level's.
If everyone is confident box office has returned/is returning strongly. We are or will soon be coming it in then why are some of Cine board, Jangho etal not piling in at these prices?
We have had nothing of note buying pr shorting really for months and months.
For me there is still uncertainty on various levels and we surely must have "something to lose" in this court case.
I am not qualified in the field of this case and as I understand it neither is anyone else on this chat board.
That aside I do value and appreciate the efforts of research HNS and some others go into on this and other Cineworld related matters.
Thanks Bonkers with the amount I have sunk into this share I have to! this is just my understanding but the logic does seem to stack up. The upshot of all this to me if we continue to see a box office recovery and that given that all the rest of the market does is see the court case hanging over Cine are we plucky retails able to arbitrage that lack of awareness of the situation and finally make a decent wedge out of this share even in the event we lose the case?
Scenario 1- Cine wins appeal i.e. complete reversal or tiny damages - happy days share price rockets we are all winners
Scenario 2 - Cine loses appeal - big sell off and further pain for us holders for a while until it becomes clear to the wider market that no damages can be collected by Cineplex and speculation about a settlement deal begins
In scenario 2 we have short term pain as the share price dips but then press reports etc begin to pick up about the reality of the situation - again assuming box office is doing its thing the share price could again rapidly rise as other catch on as to what a bargain the share actually is
Of course I have no way of knowing any of this but I have had some fun speculating at least!
Perhaps this is wishful thinking but
HNS I do like reading your posts regarding the case , ots clear you do a lot of research.
This refers to individuals but you wonder if same principals apply to companies as a “judgement proof debtor”
https://www.investopedia.com/terms/j/judgment-proof.asp
hopefully fudge Barbara’s novel judgement will be overturned during the appeal , so we can settle the dust once for good with a low negligible sum of money as we knew both parties were doing wrong .
@mountainous so here is what understand from my research
To enforce a judgement it has to be via a U.K. court and there a treaty between U.K./ Canada to recognise each other rulings unless there disputes about the process (which is rare)
That Cine stand to gain nothing from enforcing the judgement due to reasons in my previous post
That using your bailiff analogy corporate entities who owe money can have legal sanctions put on them eg they can have assets seized or accounts frozen/ scrutinised etc so they can’t plead poverty and take cash out of the business
The bit that I am unclear about is this : knowledge of Cine debt is in the public domain it’s no secret. So in this instance what leverage does Cineplex actually have - do they have the right to be vindictive and say “sod it we are putting you out of business even if we don’t see a penny” from a corporate governance perspective that seems untenable politically also as it would out thousands of jobs at risk which isn’t something either the US or U.K. would tolerate
So that leads me back to some kind of deal (assuming they lose) to pay a small sum of x over for y years or have a lump some of z and we go out seperate ways. But that these sums need to be so small that they do not cause problems for Cine in servicing their secured debt commitments
I’ve discussed this with my wife on a few occasions and we always end up at the same place - this situation I expect the market will poo the bed but is actually survivable on the assumption we trade to our target base case
@HNS, I’ve just realised you’ve also thought the same thing about Mooky dismissing an out of court settlement, I’ve had a similar thought process as well.
Cineplex would have zero leverage in that event I think, all that Cineplex can do is send people to come to CINE to retrieve the money (I assume it’s similar to ‘Can’t pay we’ll take it away’) where they send bailiffs to either collect the money or seize assets equal to the value. But even in this case, Cineplex is a foreign corporation, and I can’t possibly see how they would get a court order in the UK to send bailiffs.
No clue if that’s the way it works, but I have seen ‘Can’t pay we’ll take it away’ go to businesses in the past too, so I assume it would be the same for CINE. But it would probably need to be a UK court order, which I think would only be obtainable if the judgement was made in a UK court. This may be the case as to why getting this case ruled in a UK court is the only way for Cineplex to actually secure any funds.
All in my opinion, that is my understanding…
@Stanley, it may be the case that Mooky is so confident that he feels the entire sum could be overturned, hence why he is pursuing the court route.
In my opinion, it should be, but then again I am a CINE shareholder…
It was clear. Cineplex breached the agreement and therefore the agreement should have been voided. At worst, this should have been a nil-nil result. Obviously Barbara had other ideas.
But yes, Mooky could be extremely confident. Heck, I would even go to the extent to suggest that Cineplex may have already been in touch with CINE to negotiate an out of court settlement, but Mooky turned it down because he is entirely confident that this result will be fully overturned.
Perhaps Mooky has already been told by legal counsel that even if this appeal is completely unsuccessful and we are still liable for $1.23bn, there are so many ways to complicate it that Cineplex would never see that money anyways, and hence it may be worth a shot in court even with the option of a settlement, as the sum could be quashed out entirely. Perhaps CINE’s legal counsel has ADVISED Mooky to REJECT the out of court settlement on the basis that they feel very strongly that the sum of $1.23bn will be completely nullified.
These are just my thoughts, Mooky said he is ‘considering all options’. Very well may be the case that out of court settlement was already an option but he has dismissed it.
@Bonkers, absolutely the same here. Out of court is better for all of us.
Mooky never immediately said no when I asked about an out of court settlement, he said they are considering all options. So, it is possible that a settlement could still be reached.
Maybe if Mooky and Ellis see each other in court they might make up and decide to reach an out of court settlement lol, let’s hope for the best.
Mooky has openly stated Cine do not have the funds to pay damages as they stand
IF Mooky has had legal advice that confirms what we have read in reliable news outlets like the FT which is that Cineplex CANNOT enforce this payment or that they can enforce it but they would not be a beneficiary of this as an UNSECURED CREDITOR ahead of any secured lenders then it would make sense to hold off on any settlement discussions unless it was for a trifling sum in the low millions for them to bugger off which I doubt Cineplex would agree to anyway.
So what that means (unless I am reading the situation completely wrong which I don't think I am) is that Cineplex will be looking at £0 of the award if they win and £0 of it if they lose the appeal due to being at the back of a queue that stretches about £4.6bn
Therefore it is in Cineplex's best interest to accept a deal with Cine even in the event of a win for the reasons above.
What I do not know is what leverage does Cineplex have to compel Cine to take any action to dismantel the company in order to pay an award which it wouldn't realise even if they had the power to compel such a thing- again for the reasons stated above that they are unsecured and this we know is a fact.
I know this is more convoluted then a multiverse plot and is actually very absurd but If that is indeed the position I feel Mooky and co would possibly see the appeal through and not settle (unless it was a negligible sum) or negotiate post decision if it comes out against Cine.
Cineplex would expect to get some compensation after the Canadian court ruling... I followed the court hearing and that decision was pulled out of thin air and the claim was too ambitious in the first place. Cineworld must try to challenge the decision to then negotiate on "the courthouse steps".
Mountainous I still fancy a out of court , I saw something on Google that Said over 90% of lawsuits are settled out of court, virtually on the courthouse steps after months of prep and expense.
There are also advantages , i would imagine privacy may come to that for a period of time until accounts are shown, negotiated compensation both party's happy with , costs , etc etc and I'm sure no more legal challenges as both parties happy.
I would prefer this outcome personally and then move on from it , depends on how much both believe they are In the right.
@Huss, very well could be, but I personally do not think it is as likely as I thought before. Looks like both parties are moving forward and now the case is in 5 months time.
Let us see what happens, you never know what is around the corner.
Huss the dates were told by the cineplex chief to cineplex investors, here's a extract from the article shared by Leo.....
The Cineplex chief also updated investors on the favorable ruling from an Ontario court over a breach of contract lawsuit brought against Regal owner Cineworld Group PLC. Jacob said the Regal owner’s appeal of the Canadian court decision — which includes awarded damages of $1.236 billion in lost synergies from an abandoned takeover deal and $5.5 million in transaction costs — will be heard Oct. 12 and Oct. 13.
Cineplex has also not made any announcement. Is it because a deal is on the cards?