Member Info for HNS_77

Thanks Bonkers - I read a media report they are seeking $640m from insurers - now wouldn’t that Put a smile on all our faces!

“Crown, which does business as Regal Cinemas, alleges that its movie theaters, with more than 500 locations in 40 states, lost more than $546 million in the first half of 2020, paid more than $100 million in rent while being unable to use the theaters, and has spent $776,609 for cleaning and remediation”

My outlook on this type of thing for what it is worth

Generally speaking if you make poor decisions in life (and don't learn and grow from them) then you are more then likely to make more poor decisions in the future.

Conversely if you make informed well thought through decisions (and I don't mean lucky guesses) that lead to good outcomes based a rational thought process then the outcome of future decisions is likely (not guaranteed) but likely to be good if you use the same approach.

If I take myself as an example - the investment decisions I have made (property, stocks, career etc) have led me to the point where I can put a six figure sum into CINE carry a loss and not lose sleep over it. Because I made the decision to invest not off the back of someone shouting at me to buy it so I am not going to sell off the back of someone else telling me to sell.

My previous decisions/strategies have led to positive outcome so I am applying that same rationale to CINE - perhaps I will be wrong and get burned this time around - but why would I modify my process if on aggregate it does me more benefit then harm?

That is my take on things - and hearing people go on about the bear case for CINE (as if people didn't know it already) helps no one and is yet serves as more evidence of a poor approach to decision making (i.e. wasting you're life posting negative sentiment rather then doing something productive with your life) which is probably what led to losing out in the first place.

Good luck all!

For anyone interested in going down the legal rabbit hole on this one re-posting the full link to the case documents are here.

https://www.crowell.com/files/Crown-Intermediate-Complaint.pdf

From the various judgements on this there does appear to be a trend in favour of insurers however as posted here recently a case in the UK reversed this trend. Not to mention there is quite a clear reference to communicable diseases in the Regal policy

Not expecting miracles from this as even if there is a win will face appeal etc etc - but at least some hope of an unexpected bonus on top of the great box office line up this year.

@cruise - case conference (hearing) is taking place on 26/4/22 for the insurer lawsuit / not exactly sure what that entails but expect it marks the start of the court process

From what I read of this Cine / regal are seeking coverage of $640m owed from covid interruptions

A jury trial has been requested by Cine

That will do the debt position a world of good if they manage to pull that off!

@Bonkers that was my initial intention to cut and paste the list but I it is tiresome arguing the toss on minutiae point with certain people on here - the method I used felt robust enough and if anyone chooses to do the same it is done quite easily using box office mojo as a reference as Cine revenue correlates very well with the % US domestic bo figures

It’s good to see that others are getting to about the same figures doing their own analysis so hopefully we are all not far off the mark

I went through a tedious but useful exercise of listing the 2022 film slate and forecasting box office for each film - a lot are sequels or franchises so possible using past box office as a reference for many of the films I ended up with a maximum revenue estimate of $3.45bn for Cine or about 84% of 2019

I’ll check back on this post in a year to see if I was anywhere close to that prediction but it did give confidence that on objective data there is a clear trajectory for CINE to generate revenues to start get debt down to manageable levels

@Pig - so true and if I was Cine would be hiring a PI to track abs intercept comms between court staff including babs and K2 or associates to see what if any collusion has/ is going on between these two parties

Something we all knew anyway but post results feels more real that the share price will be sitting at or around these low levels for a while yet. Letting that sink in is quite disappointing but essential to keep sanity particularly when in a loss

Trading updates will need to be over a long period to show sustained growth and court case isn’t resolve so neither of these will provide material news for at least 6 months I expect eg we may see a good summer of blockbusters so have some good revenue projections but realistically will need a whole year to see what is going on recovery wise

That said I don’t see the total oblivion of Cine on the cards that’s too far fetched for me and I can given my reason in another post. On that basis I still see it as a worthy place to leave my money that will pay off in the next couple of years

@Mountainous - Some artistic licence I know but I’d like to think the overall outcome would be the same!

I think 80p sounds about right - so in the end this is going to be a “hang on let the box office smash it, Cine win on appeal or and wait for CP to come to their senses and accept far less” play

Good luck to everyone continuing on this journey!

Tom that is useful - I know we are covering some old ground but so what it’s good to be reminded of the added complication which is that the treaty between U.K. and Canada requires enforcement of a foreign judgement in a U.K. court

let’s picture the scene

U.K. Judge: Order Order I have hearby been notified of a Judgement against Cineworld for the sum of…$1.3bn Canadian Dollars (raises an unkept bushey eyebrow) Mr Mooky do you accept this judgement

Mooky: No we do not your honour , we totally reject it

U.K. Judge : Nevertheless I am forced to consider it based on the Foreign Judgements act - do you have anything to say on the matter council?

Cine Lawyers: Your honour we dispute the original judgement by Barbara we strongly believe she was having marital difficulties at the time and her now ex husband looked a lot like Mr Nisan Cohen which prejudiced the judgement leading to this ridiculous outcome. Furthermore if this judgement stands 1000s of people will loose their livelihoods directly and indirectly across multiple countries and at the same time Cineplex won’t see a Canadian dime of it

U.K. Judge : What a complete load of piffle and May I say ****** - this is an a front to the legal system - case dismissed!

Or something to that effect :)

What a great thread this has turned out to be.

My reading of what you posted mountainous is reminiscent of what was discussed in one of the articles some months ago about Cine’s debt bizarrely the thing saving them from the judgement award

If I am reading this correctly if they lose the appeal they are saying effectively that as an unsecured creditor CP will be so far back in the queue so triggering any process that leads to liquidation is pointless but they cannot speculate on a settlement figure either due to debts that are secured taking priority

So we go back to some form of negotiated settlement at a measly rate over years or they can perhaps agree a few million up front so CP can stand to get something out of this sorry affair and sod off

Over a year to wait , better off not thinking about it for a while!

Here’s hoping they bag a result on the insurance court case at least that one looks scheduled for preliminary court action this April

Re the appeal I must have missed this bit that was highlighted in FT coverage of the call

“ Cineworld is appealing against the Canadian court’s decision but said that it had not recognised the liability on its balance sheet as it did not think it would be resolved until after June 2023,”

That is a pretty definitive statement and aligns closely with my original calculations based on other appeals

Close your eyes and imagine in a parallel universe that Barbara was hit by a rogue mountie and was replaced with a more sensible judge who dismissed CPs claim for $1.3bn

What would the share price look like in that universe? £3 I think not but certainly A lot higher then the one we have today I am 100% sure of that

The court case is the biggest drag on this share and I for one cannot wait for it to be over and done with . I don’t have the transcript but I am sure I heard Mooky say “soon” a few times in reference to the appeal .

Previously I was keen for it to drag on But now hope it moves quickly so we know one way or the other how that is going to fall and move to the next stage.

Frighteningly positive I would say when you look at H1 performance vs H2 set out in the presentation it is clear to see the huge progress even with the constraints of covid in H2

We can all pick and choose stats to suit our argument I wasn’t expecting the sp to massively increase our off the back of this presentation given without the court case lingering- without it I imagine this would have been more strongly received

Of the deramp bingo - with these results not even a deramper could be idiotic enough to suggest today is a dead cat bounce :)

@KTP agree. strange they didn’t mention update on the Regal vs insurers court case to cover covid disruptions- that’s due to open next month and if goes well (settlement please) could be a massive payout in favour of Cine

No massive surprises but a solid and report that shows progress and confidence for the future

Glad I averaged down significantly- there will always be something to spook markets but with any luck no more covid disruptions to get in the way of what is important i.e bums on cinema seats

Has "Dead Cat Bounce" been taken yet?

@ Funivestor to believe those are cast iron predictions thlis somewhat naive of course you would expect Cine to pick the most optimistic scenario to secure liquidity - it is a projection made in the knowledge it will be reassessed based on the real progress made- I happen to know someone very closely involved in this line of work and to get things agreed bankers often go by “tell me lies tell me sweet little lies” sometimes people don’t want to know the supposed “truth” just a projection credible enough to provide terms -and then reevaluate - only a simpleton would have truly believe it was a cast member iron certainty that revenues would be at 90% - 60% or 70% is good enough to prove it’s going on the right direction which it is that is the reality of how things works which is why you find covenants being extended over and over unless it looks ridiculously out of range which thankfully it isn’t