The battleground in the fight between the University and Cinemagic 3 has expanded to include the theater's nearby competitor -- The Bridge: Cinema de Lux.
In documents filed with the Philadelphia courts, Cinemagic 3 movie theater asserted that The Bridge unfairly switched from showing the arts films it originally planned to feature and began screening the major pictures.
The Bridge views the issue differently.
According to Brian Callaghan, a spokesman for the Bridge's parent company, National Amusement, the Penn market is probably large enough for both chains to coexist.
"There is a limited number of movies out at any time, and we only have six screens. It would seem that there are lots of movies out at any given time," Callaghan said. "I don't know that the [Penn] area has been necessarily overscreened."
In the background of the debate is a looming hearing between the University City Associates -- a corporation that manages the real estate owned and rented by Penn -- and Cinemagic.
The University has threatened the eviction of the theater from its 3925 Walnut St. location on the grounds that it owes approximately $100,000 in overdue rental payments.
Cinemagic President Andrew Sheppard, however, said that the motivation behind the threatened eviction lies in the University's greater goal of revamping the 3900 block of Walnut Street.
The theater has a 20-year lease that University officials said is slated to end next year.
In addition to issues with The Bridge's cinematic offerings, Cinemagic's motion rests on claims that UCA incorrectly calculated about $5,000 in interest and failed to properly notify Cinemagic of their "rental delinquency."
According to Cinemagic attorney Jeffrey Saltz, these actions are violations of the landlord's obligations.
"Our position is that we are not required to pay rent because of the landlord's violations of its obligations," Saltz said. "We will urge the judge to strike the judgement, or if it is not stricken, to open the judgement."
In a confession of judgement, a case receives an instant judgement without needing a court hearing.
In response to Cinemagic's allegations, UCA maintains that the theater was properly notified of its default and said that "it seems patently offensive to allow [Cinemagic] ... to escape its obligations ... because of a mere mathematical miscalculation."
Penn's legal council says the issue is clear.
"The University had a lease with Cinemagic. They refused to pay the rent over a considerable period of time," Penn General Council Wendy White said. "The University got a judgement against them, for backpaid rent, and instead of paying, they tried to open the judgement," meaning Cinemagic attempted to have the judgement reconsidered.
A hearing scheduled to take place March 3 will determine whether the decision will change.
The judgement UCA entered against Cinemagic last July claims that the theater owes a total of $49,263.44, including $40,379.86 in unpaid rent, $2,019 in legal fees, late charges amounting to $2,019, and $4,845.58 worth of interest.
IRS sues Cinemagic for unpaid taxes
Cinemagic 3 movie theater's financial challenges extend beyond the approximately $100,000 in overdue rent it owes the University.The Internal Revenue Service recently placed a federal tax lien -- a claim against assets of a person who owes back taxes -- on the campus theater. The lien states that Cinemagic is responsible for $12,080.99 in unpaid taxes.Cinemagic lawyer Jeffrey Saltz downplayed the importance of the lien, saying that the company is in the process of paying off its debt and pointing out that it was not a substantial amount of money."[The lien] is not a major obstacle to continued business," Saltz said. "The IRS has filed the lien; it hasn't taken any actions to enforce it."But Joseph Sedlack, a lecturer at Penn's Law School, had a less optimistic view of the events, saying that the lien would make it hard for Cinemagic to mortgage any of its property if the need arose."A lien is an encumbrance on an asset," Sedlack said. "There have to have been a lot of steps that take place to go from a claim to a lien."
-- Nicholas Joy
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