Cineworld restructuring judgment expected Monday

A London judge is set to rule on Cineworld UK’s restructuring plans on Monday – the same day that the unprofitable multiplex chain is due to pay more than £16m in rent. Cineworld’s lawyers want Mr Justice Miles to approve a restructuring plan that will see landlords taking a hit in rents.  Cineworld has been in financial difficulties on both sides of the Atlantic, with US debts of more than $1.8bn (£1.3bn). The US company emerged from Chapter 11 insolvency last year and has been supporting the unprofitable UK business. However, earlier this year, the US company said it would only continue to support the UK business if it restructures to reduce its overheads. Cineworld UK cannot pay its £16m rent bill without help from the US company. Cineworld UK sought approval from its creditors to restructure the company, including reducing its rent bill. The company claimed many of its rents are significantly higher than the market rate and wanted them cut accordingly. Creditors approved the deal at a private meeting last week but some landlords refused to support it. At yesterday’s hearing, lawyers for Cineworld’s landlords, the Crown Estate and UKCP, asked the judge to cut them out of the deal. Ben Shaw KC, representing both landlords, said that last year his clients made a deal with Cineworld UK over rents and that there was no legal or practical reason why they couldn’t be excluded from the current plan. “The evidence is, this plan is viable without us,” he said. He added that Cineworld UK had made private deals with other landlords, including Aviva. At the hearing, Tom Smith KC, acting for Cineworld, said that if the restructuring isn’t approved, the UK company would fall into administration. “There is no prospect of raising money elsewhere,” he said. The hearing ended with the judge saying he hoped to give judgment on Monday. The case has now been listed for hearing on Monday at 10.30am.  Photo © Cineworld