Cineworld’s parent company, Regal, has confirmed that executives, including CEO Mooky Greidinger, have agreed to a payout in the range of $30 million if they were to leave the company as it prepares to exit Chapter 11. Earlier this year, documents were filed during ongoing bankruptcy proceedings in the Southern District of Texas, which indicated that current management had previously signed a contingency consultancy agreement with lenders to ensure a swift exit from Chapter 11. While there is no final decision on who will run the company, it is likely that they will exit bankruptcy soon.
Confirmation Date Set for Late June
During a hearing, Judge Marvin Isgur set a confirmation date for late June, with Cineworld expected to emerge from Chapter 11 in the first half of July. The proceedings today were mostly taken up with protests by non-inside shareholders of Cineworld. As is often the case in bankruptcy restructuring, shareholders saw their investments erased.
Debt from Acquisitions and Covid-19 Closures
Cineworld, the second biggest exhibitor in the world, had significant debt from a string of acquisitions, including Regal in 2017. They were unable to weather the hit from Covid-19, which shuttered theaters, and the subsequent slow box office recovery. As a result, they filed for Chapter 11 last September. In May, they announced a plan to raise $2.26 billion as part of its bid to exit bankruptcy after reaching a settlement with a group of minority lenders. Lenders have now agreed to pay Greidinger, his brother, and other members of their executive team a total of between $30 million and $35 million upon their exit from Chapter 11.