Imax equity manager withdraws lawsuit

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TORONTO -- Giant screen exhibitor Imax Corp. on Thursday said Canadian equity fund manager Catalyst Fund LLP has withdrawn a U.S. lawsuit over waivers it received last April from certain bondholders granting more time to file its annual financial results.

Toronto-based Catalyst Fund, which owns notes and stock in Imax, withdrew the lawsuit it filed against Imax in the New York State Supreme Court, the large format exhibitor said.

At the same time, Catalyst Fund has a separate lawsuit in the Ontario Superior Court outstanding which seeks so-called oppression remedy provisions after Imax chose to delay filing restatements of prior results.

Imax on Thursday said it will contest the Ontario lawsuit on grounds it is without merit, a position it similarly held in the New York state legal case.

Catalyst Fund, in its legal action against Imax, is attempting to invalidate a waiver the Canadian exhibitor secured in April from most holders of $160 million in senior notes to extend the deadline for filing its annual report.

In July, Imax finally restated faulty financial results for fiscal 2002 through 2005. Then, last week, Imax said it planned yet again to restate its earnings for fiscal 2006 and the first two quarters of 2007 after it uncovered another accounting error (HR, Oct. 5).

Imax also said Thursday that Catalyst Fund on Wednesday (Oct. 10) issued a notice of default on its bonds.

"The company (Imax) believes it is in compliance with the senior notes indenture and that Catalyst's claims are without merit," Imax said in a statement.

Officials at Catalyst Fund were not available for comment at press time.
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