National CineMedia is suing Regal Cinemas, one of its founding partners, for hiding behind Chapter 11 to cancel a longstanding and legally binding contract – a twist in the bankruptcy saga of Regal parent Cineworld.
Regal created National CineMedia with AMC and Cinemark in 2007 to provide in-theater advertising in and it still owns a big chunk of the company.
In a motion for rejection filed Friday in Bankruptcy Court for the Southern District of Texas, Cineworld said it wants out. “A prudent exercise of business judgement” requires the chain to either extract better terms from National CineMedia, turn to another provider, or just take ad services in-house.
National CineMedia sued for breach of contract and asked for an immediate stay. Suit here. Chapter 11 allows filers to shed, or reject, some financial obligations and contracts, that’s kind of the point, but steps must be greenlit.
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