Cineworld To Counter Cineplex Legal Action Over Scrapped Acquisition Deal

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Cineplex on Friday filed a suit against Cineworld Group after the latter terminated a deal to acquire the Canadian exhibitor in June. The action, at the Ontario Superior Court of Justice, seeks dam…

it was backing away from the deal, claiming Cineplex had both breached the terms and experienced an unspecified “material adverse effect.” At the time, Cineworld indicated that it had approached the issues with Cineplex, but that the Toronto-based exhibitor had been “unwilling to cure the breaches,” resulting in immediate termination.Cineplex’s action claims that Cineworld “breached its contractual obligations and its duty of good faith and honesty in contractual performance.

Cineworld has previously denied allegations by Cineplex that the British giant failed to comply with its obligations under the merger terms relating to pursuing the approval of deal under the Investment Canada Act. It said it has complied with all of its obligations, was entitled to terminate the deal and will “vigorously defend any allegation to the contrary.”

In today’s statement, Cineworld again denied any breaches and reiterated it will “vigorously defend this claim.” Cineworld further added, “In any event, Cineworld believes that Cineplex’s claim, if successful, would be limited to its costs and expenses incurred in relation to the acquisition and would not be assessed by reference to the consideration that was payable under the acquisition.”

 

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