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Yeah it does concern me aswell to see how badly they're cutting the main suppliers. We'ld need info on how much business they have together to put the write off into place.
Maybe there 'agreements' (as mention in the RNS) are structured to include some recovery in the coming years, and via so, the minimize the Cineplex and CBTD and maintain a good supplier relation
Found it (beware - copy paste from news article)
When Cineworld petitioned the court for Chapter 11 protection the company submitted a consolidated list of its 30 largest unsecured creditors. The list is filled with names anyone working in the exhibition industry would recognize:
Christie Digital Systems – $5.8 million – Equipment & Services
Cinionic – $8.6 million – Equipment & Services
CJ 4DPlex – $3.4 million – Equipment & Services
IMAX – $11.3 million – Film Distributor
Lionsgate Film – $15.1 million – Film Distributor
Royal Paper Corporation – $3.5 million – Concessions Supplies
Sony Pictures – $3.3 million – Film Distributor
Walt Disney Company – $12.1 million – Film Distributor
Universal Pictures – $20.5 million – Film Distributor
Warner Bros. – $7.7 million – Film Distributor
Vistar – $12.2 million – Concessions Supplies
did they specify somewhere; who goes in what group?
Who are the unsecured creditors? where did you get this info? cant immediatly find it in RSA.
Wolf - i posted without seeing your reply.
wolf - im not familiar with other C11 but it seems like in this case - all normal business parties do not take a haircut. And those that do get shares for it instead.
I can understand, if everyone is taking a haircut; there's no "animo" for shareholder relief.
Am i missing something that you've seen? What debt is also being shafted?
@ Wolf - i've reread through the Class tables. it looks like we're the only ones getting nothing.
Class 1 - Other Secured Claims - unimpaired
Class 2 - Other Priority Claims - unimpaired
Class 3 Midwest Facility Claims - unimpaired
Class 4 Legacy Facilities Claims - impaired but are getting pro-rata shares in the newco
class 5 General Unsecured claims - (Cineplex and co) - GUC Recovery pool (10mil - didnt bother to look for more)
class 6 section 510 cases ( = damages arising from the purchase or sale of securities in a debtor) i would guess this group is quite limited?
Class 7 interco's = irrelevant
class 8 = Shareholders
So only Shareholders and ppl with securities in cineworld are shafted. Even Cineplex is getting something.
I dont think any shareholder would be opposed to a new share deal or if they dont wanna trade publicly a buyout
But i fully agree this not a charity or a government bailout. it just seems that the biggest pile is getting new stock or that the less relevant parties get a (small) cash settlement, except us.
Business continues as usual
Secured debt gets almost entire company
other debt get either paid or new shares
Cineplex gets a buyoff
Shareholders get 0
they literally ran out of cash.
99,99% sure that its not a manouvre; although im sure whoever will end up owning the business will be quite satisfied they got rid that in the process
You are right - there's a lot of sense in what you're saying.
Sorry my bad - the 54,880,000 is wrong. i did 4% of shares outstanding. (1,372,000,000)
at 4b valuation, 4% would mean 160mil.
Maidit - the term unsecured has to do with warranties. No bank will give you money without securing it. its a similar approach to your mortgage
Wolf - i agree, the haircut is significant, but in short, they are getting a business that can potentially recoup it all at a resale. their 4b lost can be recovered once cine is done & dusted.
And lets be honest a 4% stake would cost them only 54,880,000 (which is but 1% of their total money)
looking at C11 history; there have been cases where the business was in worse shape so i think - it merits a consideration rathe than some of the dark very doom & gloomy views that have been posted here.
I understand that all odds are stacked against; call it naiev; call it stupid; but i have a gut feeling that getting 0% wouldnt be right. And as rational person ild be the first to say - dont follow your gut - look at the facts
But the fact that stops me from selling is the fact that cineworld will be a cash making machine.
i hear what you say wolf. The whole is deep.
They're writing of 4b and providing another 2,2b, right?
the 2,2bn will come back so their 'cost' of getting 100% of the business = 4b. which is a substantial amount for the business. if they get it back to a free cash flow of 700mil - they're prolly gonna be able to sell the lot for 5-6 (reaching)
lets say worst case - they can only sell for 4b - they still recover 100% right?
Its a lot but ultimately; they're getting everything back everything, albeit with some time passed.
There is a lot of Data and info available via the OPEN AI tools
you can see ask how the decisions are made; what parties are considered; what criteria matter and you can ask for examples of cases.
AGAIN - its not my intention to ramp - mostly this has been a copium mechanism for myself because i felt the color of the board had become very dark
Do with it as you please
Q : can you list some more examples and specify the % haircut from lenders and recovery % for shareholders
Sure, here are some additional examples of Chapter 11 cases where secured lenders took haircuts and shareholders received a recovery:
Sears Holdings Corporation: Sears Holdings filed for Chapter 11 bankruptcy in 2018. The company had $5.6 billion in secured debt, and the secured lenders received a recovery of approximately 73 cents on the dollar. The shareholders received a recovery of approximately 1.5 cents on the dollar.
Caesars Entertainment Corporation: Caesars Entertainment filed for Chapter 11 bankruptcy in 2015. The company had approximately $8.4 billion in secured debt, and the secured lenders took a haircut of approximately 11%. The shareholders received a recovery of approximately 8 cents on the dollar.
Pacific Gas and Electric Company: PG&E filed for Chapter 11 bankruptcy in 2019. The company had $30 billion in secured debt, and the secured lenders took a haircut of approximately 5%. The shareholders received a recovery of approximately 1% of their investment.
iHeartMedia, Inc.: iHeartMedia filed for Chapter 11 bankruptcy in 2018. The company had approximately $16 billion in secured debt, and the secured lenders took a haircut of approximately 12%. The shareholders received a recovery of approximately 1% of their investment.
It's important to note that the recovery for shareholders in a Chapter 11 bankruptcy can vary widely and depends on many factors, including the value of the debtor's assets, the treatment of other creditor classes, and the specific terms of the reorganization plan.
Q : in the recent history of chapter 11 cases - where there cases where the secured lenders took a big haircut, yet there was still shareholder recovery of more than 1%
A : It is not uncommon for shareholders to receive a recovery in Chapter 11 bankruptcy cases, even if the secured lenders take a significant haircut. However, the amount of recovery can vary widely depending on the specific circumstances of the case.
One notable example is the Chapter 11 bankruptcy of the energy company, Energy Future Holdings Corp. (EFH), which filed for bankruptcy in 2014. In this case, the secured lenders took a significant haircut, but the shareholders were able to recover a portion of their investment. Specifically, the shareholders received approximately 4% of the equity in the reorganized company, while the secured lenders received a recovery of approximately 100% of their debt.
Another example is the Chapter 11 bankruptcy of the retailer, Gymboree Group Inc., which filed for bankruptcy in 2019. In this case, the secured lenders took a haircut of approximately 12%, while the shareholders were able to recover approximately 10% of their investment.
It is worth noting, however, that each bankruptcy case is unique and the recovery for shareholders will depend on the specific circumstances of the case, including the debtor's financial condition, the value of its assets, and the treatment of other creditor classes.
I've been reading a lot of opinions that seem to be 100% about the outcome. as if the story has already been written.
So i did some research. btw - for anyone with questions - we live in a great time - use AI to ask questions on the history of chapter 11
In short:
There's a still a long way to go
Shareholder recovery can be included (even if not in the intial plan) - its the judge his duty to consider all parties, including shareholders. An important factor in this process is the value of the business - which we have seen in their proposal is quite signiciant
I dont wanna color opinions. I just wanted to add some info against some hard convincers that its already game over
Some general info ive found via AI will be posted below:
Q : in chapter 11 cases in the US. What are the steps that follow after the debtors in possession have proposed a restructuring plan?
Answer:
After the debtors in possession have proposed a restructuring plan, the following steps generally occur:
-Disclosure Statement: The debtors in possession must prepare and file a Disclosure Statement with the bankruptcy court. This document must contain information about the debtor's financial affairs, including its assets, liabilities, and operations, as well as information about the proposed restructuring plan.
-Confirmation Hearing: The bankruptcy court will schedule a confirmation hearing to review the proposed restructuring plan and the Disclosure Statement. At the hearing, interested parties can object to the proposed plan.
-Objections and Negotiations: Interested parties, including creditors, may object to the proposed plan if they believe it is not in their best interests. This can lead to negotiations between the debtor and the objecting parties to modify the plan.
-Confirmation of the Plan: If the bankruptcy court approves the proposed plan, it will issue an order confirming the plan. Once the plan is confirmed, the debtor must carry out its provisions.
-Implementation of the Plan: The debtor must implement the plan by making payments to creditors, selling assets, or otherwise carrying out the provisions of the plan.
-Exit from Bankruptcy: Once the debtor has completed all the obligations under the restructuring plan, it can exit bankruptcy and resume normal operations.
Wolf - with your experience - is there no room for debate from the judge ? Are plans always just approved? or is there a back & forth after inital proposal?
Where did you find this? I only found the certificate of no objection to the prolongment (Docket 1484)
Has anyone checked the recent conference after the plan was posted. Would really love to hear the judge's first thoughts on this.
Anyone have an idea how long it usually takes before an inital plan gets a verdict?
Tegop - their claim was bullox from the first place. If any damages would apply - a reasonable/rational amount would be more around 100m and most shareholders here would have already said be more willing to lean towards a reasonable settlement.