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Agree fun as I said complete brain fart , it happens from time to time
Bonkers it's not an all or nothing.
Cineplex could (in theory) be found to have done as required and "win" the case. That doesn't need to equate to all parts of their claim being successful.
For example the element for lost synergies I noted.
I struggle under any circumstances to see how that went can be paid out.
Then their and our methods of teaching claim sums can be questioned (as evidenced during court trail) meaning any final costs may be a rather different number.
Cheers also mountainous and fun appreciate it
Not watching the court case gives me the right to limited opinion , so clearly thinking behind the rest of you that have took time out to watch it.
My thinking was how could we ever be in such a position where we end up paying out money , when our counterclaim is that strong , surley with us losing it was only mitigation that would bring the costs down.
But then I had a brain fart and realised that's not the only way for minimal damages.
I never took into consideration that cineplex even if they win the case have been far far from perfect. I would imagine if the judge felt we are at wrong and gives the case to cineplex, (albeit in extreme case) then she could look at cineplex and determine that because of all their wrongs there claim would be brought down significantly which would then give minimal damages.
Think I'm back on the same page
One element of CP claim stood out beyond all else for me Bonkers ($1bn +) I think it was for "loss of synergies" by the deal not completing.
I struggled to see how this could ever even be considered, nevermind brought to my a court.
Clearly to anyone above about age 10 synergies can only be gained by a company that already has the infrastructure etc and is the one buying other business.
There is NO circumstance where Cineplex as they were/are could have benefited from synergies.
That part to me is ridiculous.
All other parts I can see (even if rather weak and stretching things) how they can be argued and end up in court.
Hello Bonkers,
I, for one, believe we are also entitled to our counter-claim because since day one this whole court case has been a waste of time. This could have easily been settled out of court, and the likely thing that happened was that Cineplex was so stuck up in its mind that they couldn’t admit any kind of wrongdoing during the without prejudice discussions.
We have been taken to court for something that wasn’t our fault and something that we terminated correctly. We paid for lawyers (which are of course very expensive) and a whole bunch of other legal costs as well probably, and that is why I feel like we ought to win our counter-claim.
I don’t know how often it happens where a counter-claim is won and the claimant loses completely, but let’s wait and see :)
Appreciate your responce too smalltrader .
I'm not wording my thinking clearly at all , but you have both answered Me in a way I put the question.
I remain positive nethertheless
Thanks for responding and in a way i hoped , I don't think for any sec we will have to pay billions. No chance.
My thinking was and for arguments sake only if we say finished the court case as owing 50k to cineplex for a small claim they are entitled too , surley with our case being presented we will still be owed money.
I'm trying to work out a way in my head where there is a chance we will have to pay minimal and all our claim is dismissed , is that not the only way we will pay minimal damages however unlikley that scenario is
Bonkers, agree that it is the judge who decides the final outcome but am very confident that it should be in our favour. The reason I say if we lose it then the damage should be minimal because CP could not put a convincing argument on the amount of damages they claimed. They really fumbled and in the end withdrew themselves talking more about it. Their arguments were based on hypotheses but court need facts and KPMG Senior Vice President clearly laid out all the facts and proved how they were wrong in claiming those damages and how they breached the debt limits. Even the most cynical and skeptical FI posted saying CP's claim was ridiculous after seeing KPMG expert testimony.
Good morning Bonkers, hope you’re well.
I also share the opinion that we will leave with $0 to pay based on what I’ve heard both here and on the court case itself. To answer your question directly, the reason why we are saying that minimal damages could happen is because the Judge will likely scrutinise this thing very very deeply, and she may end up finding something that perhaps Cineplex is entitled to claim. I can tell you for almost a sure fact that it won’t be $2.1bn.
I personally can’t see anything here that Cineplex is entitled to, but I think we are saying minimal damages just in case if something happens. I think every single person here and probably even some at Goodmans counsel have already concluded the fact that $2.1bn isn’t coming. If CP counsel laid out cold hard facts in black and white about how we deviated and how they supposedly didn’t, then I think it MAY be on the cards for them, but quite literally the opposite happened and it was CW counsel that laid out the facts.
Hope this helps :)
Smalltrader.
I'm not going to argue with you in regards to the court case , I have said many many times I haven't watched it , choosing to letting the lawyers do their thing.
So I can only go off this board to try and gauge where things are going, and I like the real positive energy it has generated.
I'm not disecting your post , its impossible to debate something I haven't been part off I would lose hands down , but there was a common sentence I have seen written by a few posters , and was wondering if you could clarify for me please what the thinking is behind it . I will also try and write this in the tone where it can be seen that I'm not being negative because it's being written by me.
A lot here ( again not just you) seem to think this is more or less a guaranteed win due to what you have all witnessed and heard in court, however it also gets mentioned in the same sentence if we lose the general opinion is we would pay minimal damages. Lpd mentioned it for instance in his post earlier. As have others.
My query is why do we think it will be minimal if we lose the case , forgetting and putting our strong case aside for 2 mins , if we lose to cineplex I presume it's because the judge felt cineplex were right and we were wrong.
Am I right in tthinking that the opinion by you and others is that we would have so much mitigation that the judge would have no choice but to lower the award to cineplex based on this. And this would be in a freak scenario that's been overlooked here due to our strong case.
I have tried wording this the best I can without sounding negative , it always raises my eyebrows when I see a good post giving plenty of reasons why we should win, but then ending with a but if we lose then expect minimal payout.
Regards
Excellent post LPD. Your knowledge and experience and the facts that you share is impeccable.
Even am very confident that court case will be in our favour. After the evidence from the KPMG, many of us who watched it live for 2 weeks, have concurred that CP clearly breached the conditions. You don't need to be a lawyer to understand it.
Even I agree that the result will be not paying a single penny or just few pennies resulting in a significant upside to the share price.
Only thing we don't know is when the judgement comes. I hope it comes by end of November.
Can't wait for the legal arguments where think Mr Steep will excel in advancing the CINE case.
Good Luck buying or topping up on a positive outcome, or on any limited downside RNS.
Always the Judge that decides.
To an ordinary layman such as myself I agree LPD, that is how it seems.
However I have no legal qualifications nevermind specialising in this field so I wouldn't pretend to say the case is won with any authority on the subject.
Those involved have far greater understandings of the law than I do and they saw fit to go to court. Unable to come to agreement beforehand fully knowing all details.
Hope we are right on this board mostly believing we should come out of it clean, BUT I don't know at this time.
Court case is won imho. Every one of the covenants had to be adhered to and ticked prior to completion. Not most of them but ALL of them.
* $200.6M deviation from "ordinary course" (Covenant breach)
* Deal done surrendering a major lease entitlement on Queensway for $25M without consent (Covenant breach)
* And how can you even remotely claim to have been running a business and maintaining it on an ordinary course when you leave it subjected to I believe somewhere in the region of 45 Rent Default and CCAA notices at one point, whilst paying down $17M to the bank.
* Accounts payable pushed out to in some cases to 156 days without engagement (Thats nearly 1/2 year) and without CINE permission. (Breach)
* Moral hazard rule also broken whereby the business you get at closure is the same as what you offered for. This rule being established to look after the interests of the purchaser between offer and closure. We were paying 42% premium to the share price provided the economics of the deal were preserved. Not Cineplex + circa $200M concealed liabilities.
*Lastly re any allegations of Bad faith. These centre mainly on delays in the ICA process. When you actually look at the Arrangement Agreement terminology it is worded "as soon as REASONABLY PRACTICABLE". That's not asap, it's not as expeditiously as possible. Cine kept the full process running all the time until termination. Never ended it prematurely and imho justified any time lines in between. (covid intervening + business in 10 territories to set right, conditionality, govt delays in reply, counsel for strategy. Hard not to see their actions throughout as justifiable and reasonable.
More than happy to wait for Mr Steep and co to present their legal arguments: Moral hazard, AB Stable etc etc.
Expecting a noticeable premium to the share price on successful defence and counterclaim. Same for any limited downside scenario. Best well shot of that deal.
Should never have gone to court in the first place and should have been resolved at the wp discussions.
Also , possibility of an appeal from the sore losers , which wouldn't be until jan /Feb...so this could go on for some months yet ..
Unless the judge rules out any appeal from either side on judgement day..
Maybe dependant on who delivers the fattest envelope
Pig we have no date when Barbara will give her verdict but the summing up from both sides is on November 1,2,3
Would someone mind just confirming when we will hear the result of our court case with CP please?
Pig