Cineworld: Advertising company files lawsuit against debtor Regal

By Sarah Lizee

Olympia, Wash., Oct. 25 – Cineworld Group plc debtor Regal Cinemas, Inc. had an adversary proceeding filed against it by advertising company National CineMedia, LLC, according to court documents filed with the U.S. Bankruptcy Court for the Southern District of Texas.

National CineMedia said it filed the suit to enforce its “long-standing exclusivity, non-competition, non-negotiation and confidentiality” rights against Regal, which the advertiser claims Regal has already breached and plans to further breach.

The cinema advertising company was initially formed as a joint venture between Regal and two other major movie theater chains.

National CineMedia said that despite the parties’ successful relationship in the past, and the expected recovery in the theater industry, Regal has stated that it will undertake one of three options, each of which will involve breaching critical terms in the exhibitor services agreement between the parties.

The advertiser said Regal intends to either rewrite a new deal with better terms for itself; enter into a new agreement with competitor Screenvision LLC or another third party; or bring in-house at Regal some or all of the services National CineMedia currently provides under the agreement.

The advertiser said the court needs to enjoin Regal from breaching any of the provisions in the agreement.

National CineMedia said that while its analysis is still ongoing, it currently estimates that Regal’s breach of the agreement would result in a damages claim of over $1 billion.

The advertiser said the claims would not be subject to a statutory cap or known theory of subordination, would be asserted directly against the debtors’ operating company, and would be structurally senior to the claims of both Cineplex, a large judgment creditor, and secured creditors who assert claims against Cineworld Group, plc.

Cineworld is a London-based cinema operator. The company filed bankruptcy on Sept. 7 under Chapter 11 case number 22-90168.

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