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" They was no conspiracy. No bias. No corruption. There are valid arguments on both sides but, as I said in the original message, all the posters who think the decisions was obviously wrong or flawed and the appeal will certainly win, have got it wrong. "
Can you confirm who said these statements? Your latest response sounds to juvenile I am now starting to question your maturity.
Tegop, I never said the judges decision was “impeccable” and that “perfect judgement was reached 100 per cent of the time” I dont know how you can infer that from what I actually said so must just assume that you are intentionally misrepresenting that. I said it may be the judgment is overturned. I will leave you and the others to hear what you want to hear and disregard and misrepresent the rest.
After all, perhaps the judge just doesn’t like the Cine investors, especially those on this board? Yeah, that must be it, it’s personal. I think we should start a petition against this biased….not just biased, but not smart…and also evil…so called judge. Everyone agree? There, that feels better. Now the share price should rise. Everyone who sold and the market has got it wrong, we are right.
Congratulations Mountainous on your small top ups :-) Obviously in my current situation I have no disposal income to play with and I've spent all my savings on top ups at much higher SPs :-( All I can do is sell some of my other stock (BT) which I don't have much left in now to average down my CINE
You mean apart from Wandsworth CINE? lol. Great they sent you a free combo, you do sometimes get free food or drink handed out at unlimited screenings too but they haven't done that for a while now
@BlueBuxton, I averaged down a very tiny bit last week with some residual free funds, nothing major.
CINE just sent me an email out of the blue saying they had added it to my card and I could redeem it on my next visit. I haven’t been to CINE in a few months, so perhaps they did that to entice me back in perhaps :)
That is a classic straw man argument to position the evidence presented as trying to prove the judge was corruption and guilty of bias when that is clearly not what has been put forward . The assertion is that relationship introduces a conflict of interest and potential for bias. As an experienced lawyer you say you are should know the difference between the two assertions
Answer this question - If you were accused of a crime and had to defend yourself in court would you want the judge ruling on your case to be related to someone who is friends with your accuser? How confident would you be they would give you a fair hearing?
That is the position here based on what evidence has been uncovered - will wait to see if it is sufficient to be acted upon
No finance house I know believe that Cineplex were owed over a billion in lost synergies. In fact Cineplex share price is as low as Cineworld. If they believed in Cineplex case, this SP would be much higher. Does not matter what people believe. The rule of law will prevail and Cineworld will not have to pay the billion. At most it will be transactional costs of 55 million. Never heard a case of a company not wanting to force through the takeover. This is why this case is not normal. All over failed takeover cases, see the party due to be taken over force through the take over. IMO
I should remind you that you are in a BB of CINE investors, naturally we are interested in CINE.
However, you are proposing that the judge/decision is impeccable and incorruptible. That the perfect judgement is reached 100% of the time. If that is the case, there should be no point in appeals. The appeal could have been dismissed by the court without hearing if there is no basis to it. But it is moving forward and is on trial.
We are merely adding an inquiry that there may be a mistrial, where someone related to the CINEPLEX board became a judge deciding a merger and acquisition case and therefore may have inclined here judgement one way or another.
Lastly, you are saying 100% of all lawyers on the planet agree on the decision, please read on my previous link posted. It could be you on an echochamber.
This post is like an echo chamber. Everyone who is long on Cine agreeing the case was certainly wrongly decided - fine - but also wrongly asserting that the whole world believes that too. They do not. The vast majority of the investment community (non retail, who generally do not read this post) will have analysed the case wit their own lawyers and came to the conclusion it was a valid decision. Not necessarily the only decision that could have been made, but reasonable and valid. It may be it is overturned but it is also perfectly possible that it wont be. It may be that an out of court settlement is reached. The point I am making is that all the assertions that the case was obviously wrongly decided or there was corruption or the judge was biased etc are not correct. You don’t have to believe me but why dont you google the case name and read the numerous reports on the case by major law firms, barristers, legal journals and analysts and see what they say. It’s unfortunate if you dont like it but that is why the share price has built in alikely (although not only possible) outcome. It is possible that the decision will stand but with a different amount of damages. Those accusing the judge of corruption and bias based on the flimsiest of evidence and the backslapping agreement from others long on Cine is juvenile and amateur.
The claim of "no corruption" here is just like Officer Barbrady in South Park shouting "move on, nothing to see here" in front a chaotic unfolding crime scene!
Thanks Mountainous! Went to my favourite Chinese restaurant :-)
How did you get the free combo? I had one with Cineworld Plus upgrade I think
I saw Everything Everywhere on Friday I found it hard work but maybe i just wasn't in the mood. I had a crazy idea Friday of selling some BT to bring my Cine average down at 23p but at 16:27 I backed out and regretted it all through that movie! Just my luck they would be a quid on Monday then lol
Further to your claim of ‘no corruption’, we have established that there is a likelihood that connections between the judge and people who would have benefitted greatly from a skewed ruling did in fact exist. This should be investigated and investigated deeply, it is not supposed to be that your chances of true justice depend on which judge took your case, there is at least supposed to be some consensus on the result, which we have seen none of from people outside of Cineplex.
Every legal analysis we have seen agrees that this ruling was excessive. Based on the minor movement of Cineplex stock that day, it appears the market is also of the same opinion.
Good evening @BlueBuxton and happy birthday!
Perhaps CINE at £1 on Monday as a late birthday present :)
I watched Everything Everywhere All At Once today as CINE gave me a free snack and drink combo and my goodness that film was confusing. Won’t spoil it for anyone, but I guess the entire premise of the film was to be confusing considering the title XD
Brilliant Mountainous, yes exactly :-)
@Andy, good evening.
The idea that Cineplex is actually entitled to $1.23bn is a complete fantasy. This is why despite Cineplex being awarded an amount that was 2x the amount of their mcap, their sp barely made a move.
You say that the synergies calculation is fair, well congrats because you and Judge Barbara are the first amongst a global population of over 7 billion to think that. There has never been any such ruling with this kind of synergies calculation from my understanding.
You are indeed correct that the outbreak is not a valid reason to exit the agreement because it was excluded, but that doesn’t mean Cineplex gets a ‘Get Out of Jail Free’ card. If Cineplex acted perfectly well during the entire time, then yes, I would say that they were entitled to that amount CONDITIONAL UPON no wrongdoing at all from them. But that was not the case, we saw the Queensway acquisition which was a breach of the agreement in my opinion. Further, Cineplex failed to act in line with normal operations. This wasn’t small either, they were doing the precise opposite of everyone else. Therefore, if Cineplex is entitled to the whole $1.23bn sum, then that means CINE is also entitled to something as well. If Cineplex would like $1.23bn for these so-called ‘lost synergies’, then how about we get an award for the hundreds of millions of extra interest expense we incurred as a result of taking out extra debt to fund the acquisition? I also must say that because the money for the acquisition was ringfenced, this meant CINE needed to take out further cash in order to fund their own business, so the interest from that should also be added, hence I think it is in the hundreds of millions.
This is a black and white matter in my opinion, yes CINE may have not acted completely in line with the agreement, but neither did Cineplex. Both have committed wrongdoing, and consequently this should be nil-nil. At worst, CINE should pay the breakage fee in the agreement and everyone goes their own way.
Andy "The whole point is that the merger didn’t happen, but damages are awarded to compensate Plex for that. The damages are designed to put Plex in the position it would have been in had Cine complied with its obligations and not tried to cancel the deal. Synergies just really mean “economies of scale”. Most of the economies of scale if the deal had gone ahead would have been for Plex’s business."
Do not agree. Why only award synergies and not own the cine debt? Because of deal had gone through then Plex would also own the cine debt. So will Plex also pay to Cine lenders for clearing the debt? Why cherry pick only synergies? Why not take and own CINEs debt too?
It is like a blank cheque awarded to CINEPLEX at the cost of cineworld to be paid in full.
"Also, failure to discount the purchase price debt that Cineworld would have imposed on Cineplex after closing puts Cineplex in a better position than if the contract had been performed."
To put it simply, Cineplex agreed to sell their business for 1$ and presented an estimate that Cineworld can make 3$ out of it. Judge Barbara awarded them 3$ compensation. They must be in some fairytale world.
Thanks for posting, Tegop. From that legal analysis, this resonated the most and reaffirms my belief that Cineworld’s current debt load is indeed a blessing in disguise.
“ Cineworld is arguing that any synergies would belong exclusively to the purchaser; Cineplex was not contractually entitled to synergies, and so they are an improper measure of expectation damages. Also, failure to discount the purchase price DEBT that Cineworld would have IMPOSED ON Cineplex after closing puts Cineplex in a better position than if the contract had been performed.”
Cineworld’s appeal process is a great three prong attack:
1. Dispute the debt covenants that Cineplex breached by way of out of ordinary business practice
2. Synergies were to be realised by the acquirer not the acquiree
3. The debt burden on Cineplex was not accounted for as part of any synergies which is a great point should points 1 and 2 be deemed unsuccessful
I believe before October, both groups will return to cash positive earnings as the movie slate matured and admissions show confidence of a return to pre-covid at which point an out of court settlement will be reached.
The synergies calculation that the judge accepted is not the only one on the table. Judge conway merely accepted the one that benefited CINEPLEX the most. This is another canadian firm commenting on the issue. I am sure CINEWORLD's appeal lawyers have more answers.
BlueBuxton, you ask :
“Where are you on Judge Barbara's calculation for damages being based on "lost" synergies. Synergies are only realised when companies are merged and this didn't happen”.
The whole point is that the merger didn’t happen, but damages are awarded to compensate Plex for that. The damages are designed to put Plex in the position it would have been in had Cine complied with its obligations and not tried to cancel the deal. Synergies just really mean “economies of scale”. Most of the economies of scale if the deal had gone ahead would have been for Plex’s business. There was an audit report presented to the court which calculated these. The court agreed and awarded Plex those damages (although other claims Plex made were rejected by the court). Cine lost. They botched the deal and the documents they signed did not allow them to walk away from the deal they struck, which had become a bad deal. The covid risk Cine’s. To be fair to Cine it was totally unprecedented and unexpected. That doesn’t matter. They was no conspiracy. No bias. No corruption. There are valid arguments on both sides but, as I said in the original message, all the posters who think the decisions was obviously wrong or flawed and the appeal will certainly win, have got it wrong. It may not be what you want to hear, but I cannot help that.
Current net debt (pre-IRFS 16) is in fact $5bn (this excludes future lease liabilities) as opposed to the often $8bn (post-IRFS 16) that is usually touted by the press.
The current debt makeup is 68% acquisition from 2018 Regal takeover ($3.4bn), so a lot more than the 40% mentions earlier by one of the posters.
With regards to a potential fire sale and liquidating of assets like property - well the said property is in fact non-existent. Cineworld completed the sale of its 35 owned venues acquired through Regal back in 2019 and then leased it back “in line with our leasehold operating model” as Mooky was quoted. Mooky has a very good relationship with EPR Properties the principal landlord for Cineworld in the US.
With a current market cap of £320m, Cineworlds only tangible assets are popcorn machines, laser projectors and some signage. The rest of their value is derived from their business model which, pre covid was profitable every year. So in summary, let the threats of liquidation, debt for equity come. They won’t even touch the sides and as such are non viable avenues of raising capital. For Cineplex who currently have an unenforceable judgement which is due an appeal hearing in October, have nothing but a worthless piece of paper. This is why Cineplex share price doesn’t reflect a cash injection of $1bn CAD.
The current debt pile is indeed saving Cineworld and will see that lenders with even the slightest sense of business acumen will support Cineworld and stick it through with them, else they get nothing and a large commercial property landlord is left with an empty estate and no rivals like AMC, Cinemark coming to take them any time soon.
Cineworld shareholders can sit back and continue to wait this recovery out. Shorters can continue worrying about getting sufficient stock to close their positions. Imagine the news once Top Gun sees cross-demographics turn up in huge numbers? MCU is already getting the teenagers and young adults back, the movie slate for this summer and the coming seasons should cement regular movie going for a more diverse demographic mix and when this happens, it is going to be a very nerve-racking time for the funds. Don’t you think, Yuri?
Expect court ruling to fall in favour for Cineworld in October. Still not a single person can explain the lost synergies for a company that would cease to exist. Feel Mooky has things up his sleeves but is either being coy about it or cannot reveal details. Time will tell.
Or, Lenders can can negotiate with CINE, who they supported through a pandemic and is more and more likely to recover than go bankrupt.
Cine had a positive quarter with just Spiderman. We expect at least 4 giant movies just this summer. Closing of unprofitable sites, opening of new sites, some cost cutting measures, ticket price hikes, 4DX, Imax, etc.
We cannot pretend to understand the company's full finances and future.
Yuri, I agree with you on paper. But Cine could negotiate with the existing investors for a hair cut like the EU have done with Greece. Would you prefer having 60/90% loss if I go into administration or a hair cut of 15/20%?they are in stake with almost $10bn not a couple of hundreds of million. Don’t forget that 40% of Cine’s debt is due to acquisitions even the issue with Plex. One more Q4 2021 generated positive cash flow so do the Q2 2022 for 2022 no need to raise more cash for our operating expenses apart for Plex. And Box Office is growing diversification has been implemented by lots of cinema chain and as well as cost cutting. What I meant is that investors know that Cinemas are not dead and they will make profits in coming years so don’t you think they would prefer waiting rather than losing 90% of their money?
Well said, even a blind man can see that, alot don't want to believe it, the sp doesn't lie.