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🎥 Cineworld's restructuring, Slaughters is the builder


In today’s email:

  • Bitcoin’s firing up

  • HSBC leaves HSBC Tower

  • Kirkland & Ellis heads east

  • Lawyers ChatGPT’d too hard

  • Web3 Daily is emailing your mum

  • How you can control the DVD logo

  • The winners of the rising interest rate

  • Cineworld’s saving itself with administration

… and more!

If you take just one thing from this email…

Going into administration is often bad news - it means that your company is insolvent (read: can’t pay its debts).

BUT, sometimes, administration can be used as a tool to help a company (well, help it survive from shutting down).

Cineworld, for example, used the administration process to transfer its assets to a holding company and give its lenders ownership of that company. This made the lenders happy enough to agree to reduce Cineworld's debt. This is known as debt restructuring and, while it's not ideal, it allows the company to continue operating.


This week, two lawyers from New York were fined $5,000 for submitting a legal brief with made-up cases from ChatGPT.

These guys asked ChatGPT for cases they could rely on and the AI gave them some names like:

  • Martinez v. Delta Air Lines,

  • Varghese v. China Southern Airlines, and

  • Zicherman v. Korean Air Lines.

The two were experienced lawyers and made the mistake of just chucking the names into their brief without cross checking them against any other sources.

I don’t want to drag them any more than they’ve been dragged already.

But, it’s a really bad mistake to make.

Besides making them look silly, it’s a bad look for lawyers generally — making it look like lawyers cut corners. Alex Su’s post on this story has a great analysis of the issue of lawyers cutting corners.

It’s also a bad look for AI in law.

I believe AI can be a great tool for lawyers — a lot of what lawyers do can be done better by AI.

But instances of over-reliance on AI like this can spook those who are on the fence about the tech and set us further back in terms of adoption.

So, let’s not blame the AI here and let’s all learn a valuable lesson from this.

Always double-check the stuff that comes out of ChatGPT.

Sometimes it’ll just make things up.

- Idin


🎥 Cineworld is restructuring, Slaughters is the builder

What’s going on here?

Cineworld, the world’s 2nd biggest cinema, is delisting its shares from the London Stock Exchange and filing for administration in the UK because it’s in a lot of debt... £6.91bn to be exact.

This isn’t good news…

But it’s not the end of the world — it’s just a way for them to restructure their debt and get back on their feet.

Why has this happened?

Well, because Covid 19 happened — the pandemic forced Cineworld to close its screens for months.

Over that time, the company racked up a ton of debt to stay afloat while they weren’t bringing in any money from customers.

Also, as we all know, streaming services are killing cinemas anyway (cinema attendance now is still lower than it was before the pandemic).

So, what are they going to do?

Administration: Cineworld is filing for administration. This means that they’re going to appoint administrators (who are licensed insolvency practitioners) probably sometime in July. The administrators will transfer all of Cineworld’s assets to a wholly-owned subsidiary of Cineworld called Crown UK Holdco. The control of the new Crown UK Holdco entity will be given to the company’s existing lenders (who are owed money). So the lenders will get equity (ownership in the new company) instead of debt — this is sometimes called a debt-equity swap because, well, you know.

In case you want more, here’s a summary we wrote of the administration process.

Delisting: After administrators are appointed, Cineworld’s shares will be removed from the London Stock Exchange where they’re currently publicly listed. This will give the company more flexibility to do what it wants in the future (being a listed company comes with a bunch of rules you need to follow). But it’s bad news for existing Cineworld shareholders – the company said that the restructuring plan “does not provide for any recovery for holders of Cineworld’s existing equity interests — that’s code for saying ‘you’re getting nothing’.

Restructuring: So, in return for receiving shares in the new company, the lenders will reduce the debt they’re owed by around £3.53bn. The company also plans to conduct an £628m equity rights issue (this is an offer to existing shareholders to buy more shares in the company so it can raise funds).

How can administration help a company?

Administration is usually a bad thing for a company. But here’s its being used as a tool to help Cineworld survive.

If they pull this off, the company will emerge from its restructuring as a smaller, more focused business.

It’ll make things more manageable but crucially keep them alive.

The company’s also using this chance to replace its management team (although, not before giving them a generous £27m payout first).

But I wanted to go see the Barbie movie next month?

Firstly, who doesn’t want to see the Barbie movie? (hopefully no one reading this is team Oppenheimer)

Secondly, we’ve got good news — you’ll still be able to see it!

Cineworld has confirmed that its screens will stay open despite the administration process taking place.

Which law firms are acting for Cineworld?

Slaughter and May is providing legal advice to Cineworld.

Kirkland and Ellis has been appointed as the administrators in the restructuring.

To pull off this restructuring, the company would need help from:

  • 💼 Corporate lawyers: As Cineworld’s shares are being delisted, they’ve gotta follow all the London Stock Exchange rules. So corporate lawyers (especially those with capital market expertise) would be needed to make sure all the necessary forms are filed with the regulators. The corporate team would also advise on the new equity issuance.

  • 💰 Banking lawyers: These are the ones who will do most of the talking when it comes to arranging Cineworld’s new loan with the lenders. They'll work with the lenders to hammer out the details of the loan agreements, security documents, and any other financial agreements that come along with it.

  • 📉 Insolvency lawyers: These people are the experts in transferring assets and dealing with creditors when a company is going through an administration or insolvency process. They'll advise on how to handle tricky situations with debt, negotiate with creditors and deal with any potential problems if things go south.

  • 💸 Tax lawyers: The tax team will help figure out the best way to structure the transaction so that it is (1) legal and (2) tax efficient (read: keep the tax bill low).

Cineworld has also instructed Alix Partners, a management consultancy specialising in corporate turnarounds, to help them… well… turn this corporate ship around.


😁 Want Web3 and crypto news that’ll make you go 'Oooh, I get it!'?

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(Yeah. That’s right, your mum.)

The email is full of the latest Web3 news, but it’s translated into plain English, which means everyone can understand it.

So if you’re sick of pretending to know what a ‘layer 2 cross-chain protocol’ is (or if you’ve never even heard of it) and want to learn about Web3, without your eyes glazing over, sign up to Web3 Daily, it’s free and you can always unsubscribe.

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I’ll get back to you on Wednesday 😴 


  • 🇸🇦 US law firm Kirkland & Ellis is opening its first office in Saudi Arabia, focusing on energy and infrastructure projects. The move comes after changes in the rules allowed foreign firms to operate in the country, joining other international law firms like Clifford Chance and Latham & Watkins.

  • 🏢 HSBC is planning to move its world headquarters away from the iconic Canary Wharf tower. They’re planning on moving to a new, smaller office near St Paul's in the City of London by 2027. This is said to be because of the bank’s commitment to flexible working after the pandemic and its aim to downsize office space — presumably staff will come in on different days so the office won’t need to be as big.

  • 📈 Interest rates have been increased to 5% and some companies are thriving. We covered the impact of interest rates and how rate increases reduce inflation (well… in theory, anyway). But while anyone with a mortgage is being financially squeezed, some companies are doing really well. The bank, Nationwide saw a 13% increase in profits and Wise, the money exchange website, saw profits rise by 234%!

  • 💸 Bitcoin has climbed to its highest level in over a year in recent days. After a tough year in 2022, where the crypto market lost a lot of value, Bitcoin has rebounded by 82% this year and is currently priced around £24,000. Big institutions are backing it too. Blackrock (the world’s biggest asset manager) tried to set up a bitcoin ETF this week, which would essentially letting you invest in Bitcoin on the stock market — this would be huge news as it would make investing in Bitcoin so much more accessible.


  • 😴 Bored: Nothing’s more 90s than watching the DVD logo floating around the TV screen. But remember how annoying it was when it never quite hit the corner of the screen? Well, it’s 2023 and you’re in control now. At last, you can make that logo move wherever you want it to!

  • 🔢 Numbers: Stat Significant is a newsletter featuring data-centric essays about culture, economics, sports, statistics, and more. Are Best Picture winners getting worse? Is Christmas season coming earlier? Subscribe for free to find out.*

  • ✏️ Cool: Every heard of the ‘frog boil metaphor’? How about ‘cake wreck’? Well, I could explain them to you but you can just look at these ‘sketchplanations’ which are much more interesting.

* This is an affiliate link. It's free to join for you and if you sign up through us, we will receive a small commission.


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