Hollywood has made its share of films linked to lawsuits.
In Erin Brockovich, the namesake of the film, played by Julia Roberts, took on Pacific Gas and Electric Company.
Bombshell featured Gretchen Carlson, played by Nicole Kidman, suing former FOX News boss Roger Ailes.
But there has never been a film in which one corporate moviehouse files the mother of all lawsuits against another corporate moviehouse after a takeover fell through.
That’s the reality, however, for Ellis Jacob, the longtime CEO of Toronto-based CIneplex.
On July 3, his company filed documents in an Ontario court seeking $2.18 billion in damages from U.K.-based Cineworld and its Canadian affiliate, 1232743 B.C. Ltd.. This was prompted by Cineworld backing out of a deal to buy Cineplex for $34 per share.
That $2.18-billion figure would be reduced by the value of Cineplex’s securities, but the Canadian company wants its $664 million in debt and transaction costs compensated.
Cineplex shares closed Friday at $8.50 on the Toronto Stock Exchange.
“Cineplex claims that Cineworld breached its contractual obligations and its duty of good faith and honesty in contractual performance,” Cineplex stated. “Cineworld purports to rely upon alleged adverse impacts of COVID-19 on Cineplex’s business to terminate the Arrangement, which it is not entitled to do.
“The contractual agreements between the parties expressly exclude outbreaks of illness, such as the COVID-19 pandemic, as a circumstance entitling Cineworld to terminate the Arrangement,” Cineplex continued. “Without any legal right to avoid its contractual obligations, Cineworld intentionally chose to breach its obligations, including its obligation to seek timely regulatory approval for the Arrangement under the Investment Canada Act.”
None of Cineplex’s allegations have been proven in court.
For its part, Cineworld denied Cineplex’s claims on June 12, accusing the Canadian company of “unwillingness to cure the breaches” related to the acquisition.
In addition, Cineworld stated last month that it has “reserved the right to seek damages from Cineplex.”
The company has started reopening cinemas throughout Canada, though not in Ontario. Movie theatres will not be allowed to reopen until stage 3 of the provincial reopening plan.
This story originally appeared in the Georgia Straight.
