Since joining Cineworld’s board of directors in 2014, Israel Greidinger and Mooky have been each paid huge sums. The company now faces bankruptcy.
In 2021, the cinema giant paid £1.4 million to Chief Executive Mooky. This included a bonus of £646,000.
Israel, the deputy CEO, was awarded £1.2million during the same period.
Despite the fact that the company had a pre-tax loss in excess of £600million for 2021, these huge packages were still paid.
The Telegraph reported that Cineworld paid more than $100m (£85m), in fees to lawyers and bankers over the past two years in a feigned struggle for survival.
Cineworld reported that it paid $9.1m last year in advisory fees to create new debt agreements and $46.5m in refinancing “amendment fees”.
Cineworld hired bankers and lawyers to help it restructure its debt agreements that were previously made at the height of Covid restrictions. These deals had been subject to severe conditions.
It spent $46.6m on legal fees and advisor fees in 2020 to establish new debt facilities. This brought the total to $102m for 2020 and 2021. Cineworld suffered a loss of $3bn in 2020 and a loss of $708m the following year.
Cineworld was on the verge of bankruptcy after it entered the Covid-19 pandemic. The firm had huge debts. Cineworld was forced to close its cinema complexes for several months.
The company’s debts exceed £ 4 billion. In addition, it has an additional £800million legal bill. This is due to its high-profile court victory after it abandoned a plan to take over Cineplex, a Canadian group.
Cineworld’s collapse is being feared by critics who point fingers at the extravagant pay packets received from the brothers, especially since creditors are likely to suffer significant losses in any restructuring.
Barry Norris of Argonaut Capital Partners, who holds a small position in Cineworld, said that the brothers were able to pay themselves huge amounts despite the company losing billions and receiving furlough money.
He stated, “These guys were taking out money in the bad times. They were still making a lot of money in the good times. It’s hard to believe that you could have presided over such a catastrophe and not resigned.
After it was revealed that the company could soon file for bankruptcy, the shares of the company plunged.
The market value of the chain, which operates 128 cinemas across the UK, dropped to £31million.
Since it stated earlier this month that there were not enough big-budget movies, its problems have escalated. Hollywood has released fewer blockbuster movies than usual in recent years, although Brad Pitt’s latest film Bullet Train was released earlier this month.
Cineworld warned that it needed more cash, and admitted to considering large capital restructuring in order to save the company.
Sources close to the matter warned that Cineworld’s creditors could be affected, which includes Cineplex. According to a source, ‘There will be a substantial haircut here for everyone.’
Cineworld stated last week that it was in discussions with many of its key stakeholders, including secured lenders and their financial and legal advisers.
