Cineworld equity holders seek appointment of official committee

By Sarah Lizee

Olympia, Wash., June 12 – A group of Cineworld Group plc equity holders asked the U.S. Bankruptcy Court for the Southern District of Texas to appoint an official committee of equity security holders, according to a motion filed Monday.

The group claims that, despite the “pessimistic spin” the debtors have placed on their financial condition, the Chapter 11 cases were really filed due to a liquidity shortfall caused by pandemic-related disruptions to the demand for in-person movie attendance, and a long-term issue with the debtors’ business was not a driving factor.

“This temporary issue – which is being addressed in these Chapter 11 cases – does not unequivocally undercut Cineworld’s overall equity value much less render the debtors ‘hopelessly insolvent,’” the group said in the motion.

“To the contrary, the debtors are experiencing rejuvenated sales that will only increase with time as the pandemic is placed further into our collective rear-view mirrors.”

The group said that the prospect of an equity recovery is at risk absent appointment of an official committee.

Cineworld is a London-based cinema operator. The company filed bankruptcy on Sept. 7, 2022 under Chapter 11 case number 22-90168.

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