Cineworld argues judge in Cineplex case ‘erred’

A Cineplex theatre is shown  in Toronto on Monday, December 16, 2019. THE CANADIAN PRESS/Aaron Vincent Elkaim

TORONTO – Cineworld Group PLC is appealing a court ruling that awarded $1.24 billion to Cineplex Inc., the theatre chain Cineworld was once due to takeover.

In documents filed at the Ontario Court of Appeal, U.K. movie theatre giant Cineworld says Judge Barbara Conway erred in her Dec. 14 decision that found the company was not justified in walking away from its deal to buy Cineplex when the COVID-19 pandemic struck.

Cineworld argues the judge was wrong to decide Cineplex did not break the terms of the takeover agreement, when it halted and deferred payments to landlords, suppliers, movie studios and film distributors.

Cineplex said in court that the moves were part of a normal course of business for theatre companies during a pandemic and did not damage its reputation with landlords and studios, but Cineworld now argues the deferrals began even before Canadian cinemas were shut down and were not allowed under its agreement.

Cineworld also claims the judge was wrong to rule that the $2.18-billion agreement between the two companies allowed Cineplex to deviate from its ordinary course of business because of an outbreak.

Cineworld did not respond to a request for comment, while Cineplex refused to speak about the issue because it is before a court.

This report by The Canadian Press was first published Jan. 17, 2022.

Companies in this story: (TSX:CGX)

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