Cineworld restructuring approved despite landlords’ challenge

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LONDON (Reuters) – Cinema chain operator Cineworld’s restructuring plan was approved by London’s High Court on Monday, 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.

Like other operators, 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 was not approved, Cineworld’s lawyers said at a hearing last week, 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.

The 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 and approved the plan on Monday, but gave UK Commercial Property Finance Holdings Limited permission to appeal.

A Cineworld spokesperson said in a statement: “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.”