Laura McGuire of City AM interviewed our Head of Class Action and Finance Litigation, David Greene this week about the troubled cinema chain Cineworld, which dropped plans to sell its businesses in the US, the UK, and Ireland after failing to find a buyer, and has filed a reorganisation plan in a Texas bankruptcy court that will effectively wipe out existing shareholdings, sending its stock to an all-time low.
Shares in Cineworld tanked over 30 per cent this morning after the embattled cinema chain revealed that it would be forced to wipe out shareholders as part of its plan to exit bankruptcy.
The London-listed firm, which filed for bankruptcy in the US last autumn, said today that it has filed a “plan of reorganisation” with the US Bankruptcy Court in Texas.
The plan aims to help the beleaguered company reduce its $4.53bn (£3.68bn) debt pile in order to exit Chapter 11 insolvency during the first half of this year.
“In light of the level of existing debt that is proposed to be released under the plan, the proposed restructuring does not provide for any recovery for holders of Cineworld’s existing equity interests,” Cineworld said in a stock market announcement this morning…
…David Greene, committee member of the London Solicitors Litigation Association, added: “Cineworld Group PLC shareholders will be smarting at the news that the value of their shares has been wiped out under plans presented to a Texas court to restructure debts and capital in a plan of reorganisation under Chapter 11 of the US Code.”
The full article is available on the City AM website.