Cinema operator Cineworld has been ordered to pay Canadian theatre company Cineplex CAD $1.28bn (£751.57m) in damages and lost transaction costs in relation to its proposed acquisition of the Toronto-based firm.
Cineplex alleged that Cineworld had breached its obligations under their arrangement agreement and/or duty of good faith and claimed damages of up to CAD $2.18bn (£1.27bn), less the value of Cineplex shares retained by shareholders.
Cineworld had defended the proceedings, stating it had terminated the arrangement agreement because Cineplex had breached a number of its covenants and counter-claimed against it for damages and losses suffered as a result of the breaches and the acquisition not proceeding, including financing costs, advisory fees and other costs.
However, when the Ontario Superior Court of Justice handed down its judgment it granted Cineplex’s claim, dismissed Cineworld’s counter-claim and awarded the former damages of CAD $1.23bn (£722.25m) for lost synergies and CAD $5.5m (£3.22m) for lost transaction costs.
Cineworld stated it disagrees with the judgment and will appeal the decision, meaning no damages were expected to be paid due to the ongoing nature of the appeal.