We would love to hear your thoughts about our site and services, please take our survey here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Extract from an article regarding MAC clauses and Covid - it would seem that the main argument is about the quantum of damages, with I guess Cineworld arguing that Cineplex suffered no loss as a result of Cineworld pulling out - the loss would have been the shareholders, but they weren't party to the agreement and so have no ability to launch an action. Still $2.8bn is a very big number, so I'll guess it will hang on the share price for a while. Personally I don't know why Cineworld didn't just mess up the application to the regulator, which was the only thing outstanding, and so get out of it in a more straightforward manner, but I guess some very fancy lawyers signed off on it!
"Cineplex Inc v. Cineworld Group plc et al. (Court File No. CV-20-00643387-00CL) involves a $2.8 billion transaction where Cineworld sought to terminate the transaction on June 12, 2020. In that case, final order approval had already been obtained from the court prior to the termination, and the parties were in the process of obtaining the regulatory approvals necessary to close, when the termination notice was sent by Cineworld Group.
Unlike Rifco, Cineplex did not seek an order for specific performance and to force Cineworld to close. Cineplex accepted what it said was a wrongful termination, and sued for damages. The question of how to get an order in a reasonable period of time within the timeframes contemplated by the parties for Closing, requiring the parties to close, was therefore not raised. Other very interesting questions were raised, however. Beyond the usual questions about the scope of the MAE clause (in that case, the parties specifically excluded pandemic-related events from the scope of the MAE), the Cineplex case raises very interesting questions about the quantum of damages.
As we mentioned at the outset of this article, an Arrangement Agreement is typically between the purchaser and the target company. Shareholders are not usually parties to such agreements, and they are rarely parties in public company transactions. In its Statement of Claim, Cineplex seeks full recovery of the total amount of the purchase price of the transaction — $2.18 billion, with other relief pleaded in addition or in the alternative. Even suing for the premium of the transaction that shareholders would have enjoyed raises questions: are those really the company’s damages at all? And even if the company could make such a claim for shareholders, the shareholders still have the control premium, and in theory could sell it again. Are there issues of double recovery in such a case? There are interesting questions to be resolved, in addition to all of the other questions that a MAE case would normally raise, of the kinds described earlier.
Even though Cineplex has not sought specific performance, it is proceeding at a relatively rapid pace, with a trial expected this fall."