Cineplex Inc. says it has won a court battle against a U.K. theatre giant that was due to purchase the Canadian cinema company before the COVID-19 pandemic struck.
Toronto-based Cineplex announced Thursday evening that the Ontario Superior Court of Justice ruled in its favour in a breach of contract lawsuit against its former suitor Cineworld Group PLC.
Judge Barbara Conway awarded damages of $1.24 billion and denied a counterclaim by Cineworld, Cineplex said.
“We are pleased that the court found Cineplex acted properly throughout this difficult period in our history,” said Cineplex president and CEO Ellis Jacob in a statement.
But Cineworld isn’t giving up. Shortly after Cineplex announced its victory, Cineworld acknowledged the ruling and noted that the court had also ordered it to pay $5.5 million for lost transaction costs.
“Cineworld disagrees with this judgment and will appeal the decision,” the company said in a statement.
“Cineworld does not expect damages to be payable whilst any appeal is ongoing.”
The acrimony between the two cinema chains began when Cineworld walked away from its deal to acquire Cineplex in June 2020.
By then, the pandemic was in full swing and theatre operators in many corners of the globe had been forced to close cinemas.
Cineplex and Cineworld reported massive losses and turned to layoffs to save any cash they could as bills from landlords, studios and concession stand suppliers came due.
As the companies navigated the crisis and awaited final approvals from Canadian regulators for their deal, Cineworld backed out of the takeover, alleging the company it was due to buy was responsible for “material adverse effects and breaches.”
Cineplex chalked up the adverse effects Cineworld was blaming it for as “nothing more than a case of buyer’s remorse” and decided to sue its former suitor for more than $2.18 billion in damages.
Cineworld filed a counter claim valued at about $54.8 million.
The court was left to decide whether Cineworld had the right to terminate the takeover agreement it signed with Cineplex in December 2019 without payment.
Cineworld argued it was free to walk away from the deal because Cineplex strayed from “ordinary course,” when it deferred its accounts payable by at least 60 days, reduced spending to the “bare minimum” and stopped paying landlords, movie studios, film distributors and suppliers at the start of the pandemic.
“Ordinary course” is a legal term that often features in acquisition agreements when companies want to ensure they will have the ability to terminate a deal and limit their risks, if other parties deviate wildly from their current operations or business model.
In response to Cineworld’s claims, Cineplex argued it fulfilled all of its obligations and continued with an “ordinary course” for the industry during the pandemic.
It said the deferred payments to landlords, film distributors and suppliers were the norm for the industry during COVID-19 and introduced testimony from studio and real estate executives, who said the delays had not strained their relationship with Cineplex.
Cineplex also claimed that Cineworld did not have grounds to terminate the deal because there was a clause exempting outbreaks of illness or changes affecting the motion picture theatre industry from being considered “material adverse effects.”
Cineworld, however, felt the clause should have no bearing on the case because it claimed it terminated the contract because of Cineplex’s inactions rather than COVID-19.
The case was seen by some observers as potentially precedent-setting for other companies that may be embroiled in their own litigations over abandoned acquisitions and material adverse effects caused by the COVID-19 pandemic.
This report by The Canadian Press was first published Dec. 14, 2021.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
