The bosses of Cineworld, which owns Regal, will collect $35 million, the Financial Times reported.
Cineworld filed for bankruptcy protection last year with debts of $8.8 billion.
A source told Insider the payout is intended to help smooth CEO Mooky Greidinger’s departure.
The bosses of the company that owns Regal Cinemas stand to collect about $35 million despite their empire filing for bankruptcy owing $8.8 billion, a report said.
The Financial Times first reported that Cineworld CEO Mooky Greidinger and his management team would receive a payout to smooth their expected departure from the company when it leaves Chapter 11 proceedings in July.
UK-based Cineworld bought Regal, the second-biggest US movie theater chain, for $3.6 billion in 2017. It also made a pre-pandemic $2.1 billion takeover offer for Canada’s Cineplex but abandoned the deal in June 2020.
The pandemic shuttered theaters, wreaking havoc on its finances and contribution to Cineworld filing for Chapter 11 protection in September 2022 owing $8.8 billion.
“This has been a challenging period for Cineworld due to the unprecedented impact of the COVID‐19 pandemic on our business and its lagging and continuing disruption to film schedules,” Greidinger said in a statement alongside financial results the same month.
The rise of streaming has also contributed to more people shunning theaters. Cineworld’s box office takings remain well below pre-pandemic levels and dozens of Regal and Eastgate theaters have closed since the company filed for Chapter 11.
A person familiar with the matter told Insider that Cineworld’s creditors intended to bring in new management, with the payout for Greidinger and his inner circle a way to speed up that process.
Greidinger’s brother and deputy chief executive Israel Greidinger, chief financial officer Nisan Cohen, and chief commercial officer Renana Teperberg will all receive a slice of the $35 million, the source said.
The Greidinger family trust owned about a fifth of Cineworld, but a stake once valued in the hundreds of millions of dollars is now virtually worthless given the collapse in the company’s share price.
Another source told the Financial Times the expected departure of the Greidingers was still a form of “comeuppance” despite the payout.
A search is being conducted to identify a new CEO, the source told Insider.
A representative for Cineworld and Greidinger declined to comment.
Read the original article on Business Insider
Source: https://finance.yahoo.com/news/bosses-regal-cinemas-owner-set-190000412.html