Cinema group settles loan challenge with liquidators

A legal challenge to moves by the liquidators of IBRC to sell a major cinema group’s €81m loans to Nama has been settled, the High Court has heard.

Cinema Holdings Ltd and Cinema Holdings Two Ltd, subsidiaries of the Isle of Man-registered Empire Cinema Group, in January sought orders blocking the sale of the loans.

The beneficial owner of Cinema Holdings, namely Thomas Anderson, claimed the transfer of the loan facilities to Nama could be disastrous for his business and employees.

The case was due to be heard yesterday when the president of the High Court, Mr Justice Nicholas Kearns, was told it had been settled and could be struck out.

Empire operates 16 cinemas in the UK, with its flagship cinema in Leicester Square, London.

In 2005/6, it acquired a number of cinema and development sites from the Odeon and Cineworld groups in Ireland through the Cinema Holdings companies.

The acquisitions were funded by loans consisting of €54.5m to the first Cinema Holdings company and €27.3m to the second, taken out with the former Irish Nationwide Building Society, since taken over by IBRC.

The companies brought the legal challenge over the sale of the loans against IBRC, the finance minister, and the attorney general.

In the action, it was claimed the company was being deprived of an opportunity to buy its loans which were being put up for sale by the special liquidators of IBRC.

Under the IBRC Act, a strategy was put in place for the sale of the loans, including who was eligible to bid for them, with a deadline of December 31, 2013.

While the Cinema Holdings companies were invited to, and did, make submissions as to how its loans were to be sold and what criteria there should be for determining who qualified as a bidder, they said the special liquidators’ decision as to the sales process meant “Empire Cinemas were permanently deprived of an opportunity to bid for their loans”.

On October 18 last, the special liquidators notified Cinema Holdings of the decision to include their loans as part of a larger €1.6bn loan portfolio sale.

If no bid was received from a qualified bidder that would not include Cinema Holdings, the liquidators would have been obliged to sell the entire portfolio to Nama or a Nama entity, the companies said.

On December 31, Cinema Holdings made a conditional offer of €81.1m for its loans, but the special liquidators rejected it on the basis the loans were already included in the €1.6bn portfolio sale.

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