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Bonkers - my understanding looking at how these are done (not being an expert on processes of canadian law in any sense! ) is that they seem to publish when the appeal goes in so does suggest we will be able to a)know it has happened and b) read the actual claim - I also get updates via Lexology which has been very helpful in updates from various law firms on the "novel" approach to this case so no doubt as Wellington says once the appeal goes in those same lawyers will be giving a view on the appeal also.

@shazbo - I dont know the law in this but Judge Conway seemed to think this was acceptable - the process seems very disjointed for the reason you state i.e. how can they possible be giving damages in excess of what they are worth and what CP is worth is yet another bizzare aspect of the award

@Bonkers, I posted a link a while back for a $2bn appeal ( SIB vs TD Bank also a Conway judgement ) and in that document the whole appeal was laid out in full - this was way in advance of any appeal date being scheduled in fact they only stated the appeal would be some time in the summer of 2022 -

What I don't know if it is at the discretion of the company submitting the appeal to publish the full document or if they have to publish it - i.e. CINE appeal will go in on the 13th so if it just a notification or the full document like this other company did I am not sure myself.

Thanks Wellington, for anyone in doubt and has a spare 15 minutes I encourage them to click the link and see for themselves.

One interesting judgement in that link that seemed similar in tone was Shaver-Kudell Manufacturing - forget about the context but the appeal judge ruled that

"motion judge erred in focusing on the morally objectionable nature of the appellant’s conduct, it does not equate all morally objectionable commercial conduct with false pretences."

No two cases are exactly alike but this seems very similar with what Conway did in the CINE judgement by painting Mooky and co as lying by putting those text messages front and centre of the judgement about not completing the deal and putting that at odds with the statements they made about being committed to the deal - The overriding question is SO WHAT and this appeal judge took that view

I have confidence CINE legal team they will take the best approach possible but like you I hope they don't spend too much of their energy trying to right the wrongs but actually highlighting how absurd the damages calculation is both from a logical and legal precedent standpoint for calculating damages.

I had a look at the appeals decision list for the Ontario appeal court and clicked on about 20 judgements that looked to involve larger companies to get a sense of how many appeals are successful - of course not scientific but it was refreshing to see a significant number of corporate judgements were set aside on my reckoning for these (not including the small case judgements) looked to be at least 50/50 - I had previously seen stats saying 1-4 appeals are dismissed but perhaps this would be skewed by those sort of minor cases particularly where the lawyers involved are not skilled or resourced to argue the appeal properly

https://www.ontariocourts.ca/coa/decisions/2021.php

@cruis I got the same response looks like a few on this board will get the same off the back of the complaint lodged a few weeks back.

Let’s see what it turns up, if anything at least it might make things uncomfortable for K2 if they are being investigated

@mountainous - if anything most of us commenting here would have been happy to chalk it up as a no score draw as the story can be spun any manner of ways with facts to back it up - e.g there was no contemporaneous evidence of positive dialogue with landlords saying “ we are having difficulties please can we negotiate a deal on rent” instead we heard they sent out template emails and ignored calls - is that “ordinary course to protect and preserve a business” all the while doing so without consulting with CW as per the agreement (again conveniently ignored by Conway)

Finally on the synergies- it’s clear that Conway judged CP to be the injured party so spun a way to reward them even though there has never been an award of this kind using this methodology in any court anywhere in the world ever

Realise I am preaching to the choir but just goes to show this judgement was very much taken with the perspective of preserving CP at the expense of CW

I have resisted weighing in with my opinion on the judgement until now as we all know the only thing that really matters is the damages value not who was proved right or wrong but as we get closer to the appeal submission i thought I would share a couple of aspects where I saw what look like obvious weakness

1. Mooky and co’s “motive” to exit the deal - were they likely upset they agreed to pay $34 per share for a business worth half or less then half before they bought it?- no **** Sherlock. Doesn’t take Miss Marple or Columbo to figure that out but Judge Conway presents it as a big revelation . To use an analogy I would rather not pay my mortgage most months it but I do because I am contractually obliged to - whether I do it with a smile or scowl on my face is irrelevant- CW didn’t take actions to sabotage the deal they observed and acted on CPs actions
2. The rent default - reading this part Conway goes full captain hindsight - she essentially says (paraphrasing) we know CP did not harm relationships with any landlords as after the fact we can see from testimony that landlords are satisfied and after terminating the agreement cp even managed to save money on rent - failed to look at or even mention the fact that AT THE TIME CP not only were they defaulting on rent and p’ing off landlords but that they had been directly threatened with court action on their material leases - that’s what was known at the time - no one had a crystal ball to say it would all be fine in the end but she expects CW to just hope that it would be all fine in the end of while overpaying for CP. it’s like saying a person jumps off a building to kill themselves but only breaks their legs so because they didn’t die it must mean they didn’t want to commit suicide in the first place. The outcome of action doesn’t negate the risk the action presented at the time!

Barbara isn’t a stupid person this judgement was biased and intentional

This is already quite a long post so I will stop there but just a couple of examples of why I believe the judgement lacked any balance to acknowledge CWs legitimate concerns. She decided early on to construct a narrative that CW were the “bad guys” in this deal so ignored anything that legitimised their position

@LPD - I have read the same even before they were closed the profits would have been impacted as they were not allowed to sell concessions which would have hit the bottom line hard both in sales but also wasted product

I don't usually take pleasure in the misfortunes of others but making an exception here given the circumstances - could make them see a sensible deal needs to be done quickly to preserve the business for the benefit of all parties involved

Ouch!

https://www.reuters.com/business/cineplex-temporarily-lays-off-6000-workers-surging-omicron-cases-shut-theatres-2022-01-06/

@Wellington - certainly not pinning my hopes on it - I doubt mountainous or others are either but harmless speculation while we wait for some real news.

It is still bizzare a $450bn mcap company like J&J were able to limit liability for cancer survivor damages like that - hopefully CW lawyers are taking notes

Interesting to note 1232743 BC Ltd is still registered as active and was renewed last March so either they have just forgotten to close it down (if it was only created for the now terminated CP transaction why would it still need to exist) or there is a reason it is still active..

@mountainous I also think it’s plausible give the J&J scenario that’s recently played out - might be the nuclear option if the appeal fails - will be interesting to see…either way business is doing just fine and can live with the damage payout if it ever came to it after likely years of wrangling

Bombdog -agree it’s unlikely but if J&J can use this tactic to deny cancer victims their justice I can’t see why Cine couldn’t give it a go - far less controversial then using it against people who have actually suffered unlike CP

Fun it was mentioned in passing in the court case but not any significant attention paid to it - in that market screener link you posted the company is mentioned and I noticed in the court judgment is against Cineworld plc and 123 BC Ltd - like I said bit of a wild card theory but would be quite a coup if they could pull it off

This is more wilder theory then I would normally go with but I cannot ignore the constant references to 1232743 BC Ltd as parties to the agreement with CP and named in court documents - with J&J recently managing to pushing its damages liabilities for the talcum powder cancer cases into a insolvent subsidiary company you have to wonder if Cine would be able to pull off the same trick

https://www.npr.org/2021/10/21/1047828535/baby-powder-cancer-johnson-johnson-bankruptcy

@Stevio good find thanks for sharing this explained it very clearly in a way I could follow

Thanks Wellington - for me the likely long wait for a final outcome feels like a double edged sword - on the one hand it works in CINE favour as it buys time to capitalise on the box office recovery and sure up their financial position however on the other hand until this is well and truly resolved I expect majority of risk averse investors will continue to wait on the side-lines before taking a position - even if it is going to take years to materialise if ever as it will be a blot in the otherwise positive recovery story for Cine

In the end it will take as long as takes so just have to be patient - the SP can still reach levels in multiples of what it is now this year even with the court case lingering

Another law firm weighs in to discuss the case. I haven't yet managed to find legal commentary on this case that presents synergies as a reasonable way to calculate damages

Crawley MacKewn Brush LLP

This approach to damages arguably provides Cineplex with a substantial windfall. Cineworld was the strategic buyer in the transaction. The synergies would arguably have accrued to Cineworld (as purchaser) if the transaction were completed. Instead of realizing these benefits, Cineworld was forced to pay them to the company it wanted to acquire. While the approach to computing damages is somewhat novel, the level of damages awarded appears to reflect a concern that a lesser award would allow parties in Cineworld's position to retain the deal premium that, if not for their breach, would have flowed to the other party's shareholders.

Cineworld has indicated it intends to appeal the decision. The means of calculating damages in particular are likely to be the subject of comment by the Court of Appeal.

There’s no denying it’s been a bruising year for Cine and it’s shareholders but despite all that there are always reasons to be cheerful about the future - the consistent recovery in revenue ending in a bumper $900m US box office proving the cinema business is fast returning to business as usual

With growing evidence omicron is likely to be signalling the end of the pandemic this trend should continue as long there are films worth watching and lots of those in next years line up

happy new year to all and looking forward to a strong and prosperous 2022!