The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Here is the link to watch the court case https://www.ontariocourts.ca/scj/cineplex-v-cineworld/
Appreciate the feedback all - genuinely trying to not be one sided (given I am invested in Cine not Cineplex) and report on any positives on the Cineplex side - perhaps I am missing something but I cannot see much strength in their case certainly nothing approaching the kinds of damages they believe they are entitled to
Perhaps they are saving something up something big for later - who knows but right now looks loaded in Cineworld's favour at the moment
Or if you interpret that in an extreme way - him (the man in charge of negotiating with landlords the repayments of deferred rent) not being told/not knowing they still owed money for March, it doesn't tell me they were serious about those negotiations, because surely being that person you would want to be armed with all the facts, and Cineplex would want their representation in those negotiations armed with all the facts, if they were serious about planning to repay them.
I would agree with you Jamesy, but that didn't help their case in anyway for him to admit he didn't know about that (especially given they have already accepted they started deferring in March), if anything it made him/them look incompetent.
Moneypit - just because he said he didn't know about March deferrals doesn't mean he didn't. You gotta remember they have all been briefed on a significant agenda to show that the business was performing normally. My overriding view was that he didn't come across as someone as senior as his title suggested and that all of this is making Cineworld look like prudent professionals in comparison.
What I also found, well quite astonishing to be honest - was that the man they have in charge of owning those relationships with landlords, and dealing with the communication on no payments being made for three months, and negotiating repayment options (that he was told he wasn't allowed to do during April-May) - he didn't know they still owed money to those same landlords for March - he thought they were all paid until April. I don't think that impacts on our case, but still he is the one guy (other than the CFO, and probably in more detail) I would expect to know what is owed to whom and from when.
Thanks HNS, my thoughts on today are very similar to your own, not a bad day for us (again based on pure argument and having no legal experience myself).
I do think their witness today came across as very defensive, to the point of almost being aggressive, unlike their previous two witnesses. It was interesting to watch our guy twist it around to finally get him to accept the points being made and throwing example after example at him. And I did smile when our guy in response to the judge asking how much longer he will need saying 'probably another hour at the rate we are going'.
HNS, thanks for sharing your thoughts. Keep it coming please.
Today CINE did very well despite the market rout.
CINE has a product that has no big competition other than AMC and the product has no expiry date. Only threat perceived was streaming but we have discussed a lot about it.
Even with $6bn debt in 2019, CINE paid dividends and share price was £1.90 so the current debt is still manageable and current price is at a bargain basement. Just get the Cineplex out of the way with minimal or no damage and the path to 80p will be clear in Q4.
Thanks HNS good summary, I couldnt really what was achieved by calling the Paramount exec and our lawyer didn't even question him :-)
HNS_77, wow, no wonder Cineplex SP went down. I actually can't believe why Cineplex took Cineworld to court, they must of thought they would get away with it and just blame the pandemic . Doesn't look good for cineplex at all.
Thank you HNS_77 for taking time out to tell us all who never listened to it. It all reads very positive for Cineworld. I will definitely be listening to it on Wednesday.
Thanks to you to JG68, do you not think the judge just looking at Cineplex and feels sorry for them as she knows the evidence is stacked up agaist them, and she is more assertive when it's Cineworld legal teams turn? Lol. Or wishful thinkinh, I need to watch her now ha.
HNS
Thanks for that, really useful summary.
The part I listened to the cineplex lawyer was trying to to justify their actions by showing that without taking those actions they never would have made the savings they did, contrary to whatever contract they were tied into.
The only thing that slightly concerns me is the body language and facial expressions of the judge, she does seem somewhat softer when their lawyer is up and seems to harden when CINE legal team enter the fray.
Maybe I'm being paranoid but check it out on Wednesday.
Should have ready CEO was a “very very nice man”
Another day in court and imho another strong day for the Cine defence here is my assessment
I missed the remaining cross of the legal representative but the cross of the estates lead landed a number of points
1) Cineplex had no intention of engaging in negotiations with its landlords and simply refused to pay rent with cut and paste emails providing no clarity on a plan of when they would resume
2) that landlords made good faith proposals that were refused in totality even very small landlords one called Cineplex a bad corporate citizen or words to that effect . Effectively Countering Cineplex narrative as “working productively with their landlords” through a range of emails and ms teams messages which made it very clear the steer from the top was not to pay any rent or entertain any proposals primarily to maintain the debt position to complete the deal and using landlords as a bank
3) the suspension of rent period exactly reflected the outside date of the agreement to complete the Cineworld deal again strengthing the suggestion it was being done to stay in the debt limit and not what they would have ordinarily done by treating landlords in this way
For me the main takeaway is that Cineplexs Desire to meet the debt covenant was paramount and that they were willing to harm relationships with their landlords and not engage properly in these matters by issuing blanket refusals to pay and not engage on any terms other then no payment
counsel for Cineplex tried to rescue this a senior exec witness from Paramount who testified to say the CEO was a very now very man and they got paid in advance of films being released again. No questions on the cross - on to Wednesday….