Samantha Galway

Cineplex and Cineworld entered into an Arrangement Agreement for Cineworld to acquire Cineplex for $2.8 billion.

Following the outbreak of the COVID-19 pandemic and mandated theatre closures, Cineplex deferred payments to landlords and suppliers to manage liquidity.

Cineworld terminated the agreement, alleging Cineplex breached the ordinary course covenant.

The court found that Cineplex's cash management measures were commercially reasonable and did not breach the agreement, noting that the pandemic risk was allocated to Cineworld under the Material Adverse Effect clause.

Cineworld's termination was a repudiation, and Cineplex was awarded $1.24 billion in damages for lost synergies and transaction costs.

The appellants appealed a judgment allowing an oppression application that granted the respondents sole authority to conduct a civil action.

The respondents had sold their shares in a company to the appellants but retained the financial benefit and cost obligations of an ongoing lawsuit.

The relationship deteriorated, and the appellants ceased pursuing the lawsuit and withheld information.

The Divisional Court dismissed the appeal, finding no palpable and overriding error in the application judge's conclusion that the appellants' conduct violated the respondents' reasonable expectations, nor any error in the remedy granting the respondents control of the litigation.