Cineplex Odeon Restructuring

On February 15, 2001, Cineplex Odeon Corporation (and related companies), Canada’s second-largest chain of motion picture theatres, received an initial order under the Companies’ Creditors Arrangement Act from Mr. Justice Farley of the Commercial Court. The initial order (i) stays and restrains all proceedings against the applicants, (ii) allows the applicants to restructure their affairs so that a plan of compromise or arrangement may be proposed to their creditors, and (iii) allows the applicants to borrow US$20 million from their parent corporation, Loews Cineplex Entertainment Corporation, with Deutsche Bank Canada acting as the agent for such loan. Pursuant to the initial order, Ernst & Young Inc. was appointed as monitor of the applicants.

The filing of Cineplex Odeon Corporation was made concurrently with the filing of Loews Cineplex Entertainment Corporation under Chapter 11 of the US Bankruptcy Code. The filing of both companies was a consequence of the overbuilding in the motion picture industry and the need of exhibitors to relieve themselves of the burden of long-term leases of theatres which have become obsolete as a result of the construction of more modern megaplexes, as well as the need to compromise the heavy debt load incurred in this process.

Stephen N. Pincus, Robert J. Chadwick, Robert Vaux, Donald Pierce, Ken Herlin and Monica Mraz of Goodmans LLP are advising ONEX Corporation as the lead equity sponsor in respect of the acquisition of Loews Cineplex and Cineplex. Cineplex Odeon Corporation and the other applicants are represented by Davies Ward Phillips & Vineberg LLP: Jay Swartz and Denis Ferland (corporate/insolvency), Matthew Gottlieb and Brian Smith (litigation), Paul Kennedy, Gabriella Lombardi and Rod Davidge (real estate) and William Ainley (corporate/securities). Loews is represented by Peter Griffin of Lenczner Slaght Royce Smith Griffin and the monitor is represented by Sean Dunphy of Stikeman Elliott.

Gowlings acts for the American lending syndicate to Loews and for Deutsche Bank Canada in connection with the establishment of a US$20 million DIP credit facility in favour of Cineplex and in connection with the CCAA proceedings generally. The syndicate is the largest creditor of Loews. Gowlings lawyers acting for the American lending syndicate and for Deutsche Bank Canada are: Tom Cumming (insolvency/lending), Jeff Goldenthal (credit agreement), Alex Macfarlane (insolvency), Martin Ross and Thomas Subic (real estate), Dom Glavota, Patricia MacDonald and Rachel Conway (lending), Jodi English (IP), David Kierans, Henry Ellis and Richard Myers.

Oxford Properties Corporation and other landlords are represented by Walter Stevenson, Scott Campbell and Conor O’Hare of McLean & Kerr LLP; Cadillac Fairview Corporation is represented by Jim Grout, who is assisted by Mahesh Uttamchandani of Thornton Grout Finnigan; Warner Brothers Entertainment is represented by Bruce Leonard and Shahana Kar of Cassels Brock & Blackwell LLP; Universal Studios is represented by Steven Golick of Osler, Hoskin & Harcourt LLP; Oak Tree Capital is represented by Derrick Tay, Tony Reyes and Orestes Pasparakis of Meighen Demers LLP; Columbia/TriStar is represented by Kevin McElcheran of Blake, Cassels & Graydon LLP; the Independent Members of the Board of Directors of Cineplex Odeon Corporation is represented by Edmond Lamek and Jonathan Levin of Fasken Martineau DuMoulin LLP; Western Properties Ltd. and CREIT are represented by Harvey Chaiton of Chaiton & Chaiton; and Manulife Financial is represented by David Chernos, Mario Forte and Jane Helmstadter of Torys.