American Multi-Cinema v. National CineMedia
Court
Fifth Circuit Court of Appeals
Decided
June 10, 2025
Jurisdiction
F
Importance
48%
Practice Areas
Case Summary
Case: 24-20386 Document: 102-1 Page: 1 Date Filed: 06/10/2025 United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit ____________ FILED June 10, 2025 No. 24-20386 Lyle W. Cayce ____________ Clerk In the Matter of National CineMedia, L.L.C. Debtor, Cinemark Media Incorporated; Cinemark USA, Incorporated, Appellants, versus National CineMedia, L.L.C., Appellee, __________________________________________________ In the Matter of National CineMedia, L.L.C. Debtor, Cinemark USA, Incorporated, Appellant, versus National CineMedia, L.L.C., Case: 24-20386 Document: 102-1 Page: 2 Date Filed: 06/10/2025 Appellee. ______________________________ Appeal from the United States District Court for the Southern District of Texas USDC Nos. 4:23-CV-2414, 4:23-CV-2485 ______________________________ Before Jones, Southwick, and Oldham, Circuit Judges. Per Curiam: * This court has carefully considered this appeal in light of the briefs, oral argument, and pertinent portions of the record. Having done so, we substantially adopt the analysis of the district court’s opinion, which affirmed the bankruptcy court’s rulings. 1 Accordingly, the Most Favored Nations (“MFN”) clause in Cinemark’s Exhibitor Services Agreements (“ESA”) with the debtor National CineMedia LLC (“NCM”) was not triggered by Regal’s entry into a Network Affiliate Transaction Agreement (“NATA”) with NCM. The MFN clause in Cinemark’s ESA provided it the right to match the terms of an “agreement, amendment or extension” between Regal and NCM “which amends any term” of Regal’s ESA. Regal, while itself a debtor in bankruptcy, terminated its ESA with NCM through a Termination Settlement Agreement (“TSA”). Regal then entered into the NATA with NCM. The TSA did not amend any term of Regal’s ESA because it _____________________ * Pursuant to 5th Circuit Rule 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5th Circuit Rule 47.5.4. 1 This court reviews the NCM bankruptcy court’s “Settlement Order” under Bankruptcy Rule 9019 for abuse of discretion. In re Moore, 608 F.3d 253, 257 (5th Cir. 2010). No abuse occurs unless the court made an error of law or clear error of fact. In re Yorkshire, LLC, 540 F.3d 328, 331 (5th Cir. 2008). Case: 24-20386 Document: 102-1 Page: 3 Date Filed: 06/10/2025 terminated the ESA, whereas “amend” contemplates modification of an ESA’s term that nevertheless preserves the agreement’s existence. The NATA did not amend any term of Regal’s ESA because the TSA had terminated Regal’s ESA, and the ESA must exist for the NATA to amend any of its terms. The MFN clause in Cinemark’s ESA was not triggered. 2 The judgments of the bankruptcy and district courts are AFFIRMED. _____________________ 2 NCM and AMC, the other party to the appeal, agreed to dismiss the appeal as to AMC by a joint motion for dismissal.
Case Details
Case Details
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Status
Decided
Date Decided
June 10, 2025
Jurisdiction
F
Court Type
appellate
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Case Overview
Case Name: American Multi-Cinema v. National CineMedia
Citation: Unknown
Court: Court of Appeals for the Fifth Circuit
Date: June 10, 2025
Jurisdiction: Federal
This case involves an appeal concerning the interpretation of a Most Favored Nations (MFN) clause within the Exhibitor Services Agreements (ESA) between Cinemark and National CineMedia, L.L.C. (NCM). The court evaluated whether the MFN clause was triggered by Regal's entry into a Network Affiliate Transaction Agreement (NATA) with NCM after Regal terminated its ESA with NCM.
Key Legal Issues
- Interpretation of the MFN clause in the context of bankruptcy.
- The implications of a Termination Settlement Agreement (TSA) on existing contractual obligations.
- The distinction between termination and amendment of contracts.
Court's Decision
The Fifth Circuit affirmed the decisions of the bankruptcy and district courts, concluding that the MFN clause in Cinemark's ESA was not triggered by Regal's NATA with NCM. The court adopted the district court's analysis, emphasizing the legal definitions of amend and terminate.
Legal Reasoning
The court's reasoning centered around the definitions and implications of the terms used in the agreements:
- The MFN clause allowed Cinemark the right to match terms of any agreement that amended Regal's ESA.
- Regal's termination of its ESA through the TSA meant that the ESA no longer existed, and thus, no terms could be amended.
- The NATA did not constitute an amendment since the ESA was terminated, and therefore, the MFN clause was not applicable.
Key Holdings
- The MFN clause in Cinemark's ESA was not triggered by Regal's NATA with NCM.
- The TSA's termination of Regal's ESA precluded any amendments to it.
- The court affirmed the lower courts' rulings without finding any abuse of discretion in their decisions.
Precedents and Citations
- In re Moore, 608 F.3d 253 (5th Cir. 2010) - Established the standard for reviewing bankruptcy court decisions.
- In re Yorkshire, LLC, 540 F.3d 328 (5th Cir. 2008) - Discussed the criteria for abuse of discretion in bankruptcy rulings.
Practical Implications
This ruling clarifies the interpretation of MFN clauses within the context of bankruptcy and contract law, particularly regarding:
- The importance of precise language in contractual agreements.
- The legal distinction between termination and amendment, which can significantly impact contractual rights and obligations.
Legal professionals should note the implications of this case for future negotiations involving MFN clauses and similar contractual terms, especially in bankruptcy scenarios. The decision underscores the necessity for careful drafting and understanding of contractual language to avoid unintended consequences in legal interpretations.
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Case Details
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Status
Decided
Date Decided
June 10, 2025
Jurisdiction
F
Court Type
appellate
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