Cinar Agrees To Pay Restitution To Telefilm Canada
Created 06/27/2001 - 23:00
CINAR Corporation announced that it has reached an agreement with Telefilm Canada to make full restitution for all investments and other financial subsidies made by Telefilm Canada in CINARs productions that have been decertified, or for productions for which final certification will not be granted by the Canadian Audio-visual Certification Office (CAVCO). Under the terms of the agreement, CINAR will repay Telefilm Canada approximately $2,594,000 in full reimbursement of investments and subsidies including interest. These amounts will be payable over the next two years with interest at prime rate plus 2% compounded monthly. With this agreement in place, CINAR, whose applications for co-production certification have not been processed by Telefilm Canada since November 9, 1999, will once again be eligible to apply for certification of its productions. However, Telefilm Canada has imposed a five-year suspension on CINAR and its subsidiaries, with respect to investments, subsidies and other financial assistance, retroactive to November 9, 1999. As of January 2002, the terms and conditions of the suspension may be reviewed, which could result in a partial reinstatement of CINAR. Furthermore, if CINAR is sold, or undergoes a corporate reorganization that involves a change in the control of the Corporation or any of its subsidiaries in favor of a third party at arms length, the suspension will be lifted, but not prior to January 2002. The agreement gives Telefilm Canada the right to audit certification files, past, present and future. CINAR is continuing discussions and negotiations with other funding and film regulatory bodies.