. The next step will be for a ‘Sanction Hearing’ in London on Thursday (September 26) when it will be up to a judge to rule whether creditors will be materially better off under the plan than they would be if the cinema chain fell into insolvency. The challenge is that several of Cineworld’s major landlords – including, according to Sky News, British Land, Landsec and Legal & General – voted against the restructuring.
The plan was nonetheless passed by creditors because the “intercompany lender” and the “loan company lender” voted overwhelmingly in favour. “The landlords are going to have this rammed down regardless. It is not a question of them accepting it or not.
The largest class of creditors are the lenders, who are also the equity holders. [The restructuring plan] was designed by the company so they could crush the votes of the landlords,” one property expert told of the restructuring plan, which is being pursued under 26A of the Companies Act. “Because [the lenders] have one foot in the shareholder bucket and one foot in the lender bucket, that gives them control over this process.
” Goldentree, the Wall Street hedge fund that owns the Travelodge chain, has been widely reported in the UK press as one of the funds leading the contentious restructure. “It is one big poker game and that is what these ‘vulture’ hedge funds love doing,” the source added. The landlords also included several local councils including Barnsley, Solihull and Sout.