TORONTO — The chief executive of Cineplex Inc. says his company's decision to slow payments to film studios and seek rent deferrals and abatements during the pandemic was akin to moves being made by Cineworld Group PLC and other large Canadian retailers.
Ellis Jacob told the Ontario Superior Court of Justice this morning that after COVID-19 started spreading, it was common for global theatre operators and other businesses to try to preserve cash in these ways as people avoided non-essential gatherings.
Cineplex's response to the pandemic has been a key issue as the Toronto theatre chain faces off in court against Cineworld, a U.K. cinema company that was due to purchase Cineplex for $2.8 billion.
Cineworld backed out of the deal in June 2020, arguing it had the right to terminate the agreement without payment because Cineplex strayed from "ordinary course," when it stopped paying landlords, movie studios, film distributors and suppliers at the start of the pandemic.
Cineplex's lawyer Alan Mark argued the company was following the ordinary course of business because Cineplex told Cineworld about its payment stoppages and was told that Cineworld was seeking similar payment relief for its own theatres.
Cineplex is seeking more than $2.18 billion in damages from Cineworld, which filed a counter claim valued at about $54.8-million.
This report by The Canadian Press was first published Sept. 23, 2021.
Companies in this story: (TSX:CGX)
The Canadian Press