Member Info for Wellington99

@mattwales - Christ's sake - THEY WERE GIVEN OVER AS PART OF DISCOVERY

Mate, if you are so ignorant as to how the world works, sell now and buy lottery tickets.

@HNS_77
Are you saying that the judgement is unenforceable?

@Alex01 - someone has to Google it, but you are saying that you won't bother and just leach off of other's hard work?
It takes two to tango.

@Bonkers

Thanks, but there is so much idiocy, it takes its toll!

Screenshot this, as I believe it is the truth:

We will prevail.

@Alexp01
Yes, it's a new judge and a new court.
If you want to help the board, you can Google Canadian legal system and help us answer the question.
Assuming that is what you want to do...

Under English Law (which Canadian Law is closely related to) the appeal would be heard by a superior court, and potentially more than one judge, especially since this would be a precedent setting piece of case law.

I would expect that depending on the outcomes, this would be raised to the Canadian equivalent of the Supreme Court as the ramifications for the rest of the legal system are huge.

@shortCINE - I doubt that they would 'negotiate a fair sum' unless Cineplex thought that by enforcing the order (which I expect to be massively reduced on appeal) it would put Cineworld into an insolvency procedure and thus relegate their claim to that of an unsecured creditor.
What is much more likely is that the quantum will be appealed (and the principle obvs) and brought down when proper evidence can be supplied.
Look at it this way: Cineworld are culpable for terminating the agreement unlawfully. Let's take that as a given for now.

The next step is what is the measure of damages?

*Read the judgement*

It skates over the calculation because Cineworld hadn't applied their mind to it because they didn't think that that was the major area of contention because they thought that they would win under other headings.

THIS IS VERY IMPORTANT

The judge decided that the correct method of calculating damages was the loss of synergies.

THERE WAS LITTLE OR NO DISCUSSION IN THE TRIAL AS TO HOW THAT CALCULATION OUGHT TO BE MADE SO SHE JUST WENT WITH THE CINEPLEX SUBMISSION

I must have posted this half a dozen times today but, once again for completeness:

that leaves ample room for accepting that Cineworld was at fault and that that is the correct methodology BUT THAT THE VALUE OF DAMAGES IS 90% LESS THAN WHAT WAS AWARDED.

The reason for this is that Cineplex could not gain the synergies without Cineworld's assistance i.e. by using Cineworld's US hub and infrastructure. If, as the judge requires, one needs to look at the different legal entities to assess who wins and loses, then there is no way that Cineworld would provide the services that Cineplex would need in order to realise tjose synergies WITHOUT LEVYING A MANAGEMENT CHARGE

To my mind, that alone is uncontentious and would halve the award, and that is before we look at the level of debt that the Cineplex legal entity would be required to assume along with interest payments to make th transaction work.

Net net?
Tops ~ CAN$100m but nowhere near CAN$ 1.2bn.

PS Given the nonsense on this board I don't know why I bother.

@crumpets Lots of the shorts closed last year when it dived to 20p (IIRC it went from 12% short to 4% short or something like that) New shorts opened at 80p and above.

BTW if anyone actually believes that the CAN$1.2 bn will be paid then they should go and load up the van with Cineplex stock, because that's only up 13% today to CAN$13.30 whereas CAN$1.2 bn divided by the issued share capital of 65million shares is CAN$18 PER SHARE.
That's right - they were worth CAN$11.70 yesterday and are now worth CAN$1.60 more even though they just got awarded over 10 times that.
Maybe there's a discount because they think Cineworld will go bust before paying it, but I think it shows that to use the title of this post there has been massive overselling today.

What's the betting that the shorts that closed were our Ontario based friends at K2 *the event driven hedge fund*?
@ Kick
"Bluehorseshoe *hates* cineworld"

ALthough IIRC he went balls deep into HBR and that has been not great (although much better than this!)

@kick -plenty more room in the green coffin section.
Wonder where Latpulldown is today.
Plenty of real derampers for him to tell off!

BTW as I was typing the previous post I got an email from a research website saying
"The level of disclosed Short Interest in CINE has changed materially. Short Interest has moved from 9.52% on the previous trading day to 8.80% today. That is a movement of -0.72 percentage points."
Some people think it's gone low enough and are closing their shorts

In the long run, yes, but I can see it going lower with Omicron - that's going to look very scary over the next couple of weeks as infections will be vertical - like Tom Cruise in Top Gun 2 - and there will be pressure to close hospitality.

Professor Witty is like Sir Arthur ‘Bomber’ Harris. He is so fixated on waging total war on Covid that he doesn’t seem to care about what other ‘collateral damage’ is caused in the process.

Come the New Year we should be back on an upward trajectory.

I would say we bottom out at 17p in the last week in December (that's a pure guess!)

@Big
Evergreen post that one.

Sky really are awful, that's such a poorly written article.

@OhhAhhCantona Great minds think alike or fools seldom differ
I was thinking along the same lines - Cineworld has good relationships with many banks and at the moment it would be cheaper to buy Cineplex at a 50% premium to today's price than pay the settlement - that way you also get the Cineplex business for free. Alternatively there are plenty of Private Equity firms out there with lots of dry powder who could make a quick buck from this current scenario. Absent Covid (which we will soon be out of) the underlying businesses are very profitable, it's the capital structure and availability that's the problem. I would include Mooky's family trust owning c20% of the equity as part of the capital structure problem)
I think we can be sure that there are lots of weird and wonderful ideas being kicked around at the moment in Cineowrld HQ right now

I posted it in an earlier thread but given the amount of nonsense on the Board, it quickly got swamped.
https://www.ontariocourts.ca/decisions/2021ONSC0816.pdf
TL;DR - Cineworld terminated improperly, but the size of the damages is clearly wrong.
(I'm not a lawyer, so can't critique her reasoning for finding against Cineworld or for selecting lost synergies as the criteria, but I am a Chartered Accountant and I can fault the way that the number has been calculated. It was a selective finger in the air job by Cineplex dressed up to look reasonable and Cineworld didn't attack it in their evidence as they didn't take it seriously - that will now change in the appeal!)

@OhhAhhCantona - I agree.
Reading the judgement it's clear that the CAN$1.2bn is a marker that can easily be reduced.
It's helpful having the Judge's thinking set out so we know where the battle lines are drawn.
Also Cineplex is only up 9% now which in real money is under CAN$100m so no one believes that that is the amount that will actually get paid.
The next couple of weeks will be hardest as Omicron goes vertical, but by the first week in Jan it will drop down again and fingers crossed that will be the end of Covid as a meaningful issue.

This thread has aged rather well.

Cineplex is up 15% which is equivalent to a Market Cap increase of CAN$115m
So if they really will receive CAN$1.2 billion, why does the market only value it at 10% of that?
Answer - because in North America it's quite common to get very large settlements announced only for them to come down drastically on appeal.

I mean, it's a zero sum game between the two - the damages would have wiped out the whole of Cineplex's debt and left half a billion extra for equity holders, so the stock should be a steal at these prices.

The glass is half full my friends!