As has been widely reported, cinema chain operator Cineworld's restructuring plan was approved by London's High Court this week, despite opposition from two landlords.
Cineworld, whose brands include Regal, Cinema City, Picturehouse and Planet, set out a plan in July to restore to profitability, including addressing its lease portfolio and rental terms with landlords in Britain.
As has been the case with many other exhibitors, Cineworld, which operates in 10 countries with 9,189 screens, was hit hard by the COVID-19 pandemic, when many movie releases were postponed or went directly to streaming platforms. It emerged from Chapter 11 bankruptcy with reduced debt and new funding last year.
If the restructuring plan had not been approved, Cineworld's lawyers said that four of the group's companies would have to be placed into administration for a second time.
But UK Commercial Property Finance Holdings Limited and the Crown Estate Commissioners said Cineworld had agreed in 2023 not to make any further amendments to their leases in the event of a restructuring plan, in return for rent reductions.
Cineworld’s landlords argued that the plan, which involved further substantial rent reductions, amounted to a breach of contract and they should be granted an injunction to block the plan.
Judge Robert Miles rejected the landlords' arguments but gave UK Commercial Property Finance Holdings Limited permission to appeal.
A Cineworld spokesperson said, "We are pleased that the court has approved our restructuring plan. This will enable us to re-set the business for the long-term and ensure a sustainable future for Cineworld in the UK.”