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Cineworld is said to be facing a legal challenge from one of its landlords after the cinema chain failed to pay rent during the coronavirus lockdown.
The London-listed cinema group is understood to be withholding rent from property giant AEW after it was hit by closures due to the Covid-19 crisis.
Read more: Top 10 most shorted UK stocks: Hedge funds bet against Metro Bank, Royal Mail and Cineworld
AEW has now filed a legal challenge against Cine-UK, a UK subsidiary of Cineworld, the Telegraph reported.
Cineworld is one of a number of UK companies that have refused to pay rent during the pandemic.
Sports Direct, Boots and Travelodge are among the other firms that have withheld payments either partially or in full.
In March the government introduced a three-month moratorium on lease forfeiture and debt enforcement to help businesses that are struggling to pay rent due to the lockdown.
This has since been extended to the end of September after the hospitality sector warned many businesses faced closure without further support.
But the measures do not prevent landlords from taking legal action to recuperate unpaid rent.
The coronavirus crisis has taken its toll on cinema chains, which were forced to close their doors during the lockdown.
Cineworld has seen a steep decline in its share price since the start of the year and is one of the most shorted UK stocks.
The company faced a fresh blow last month when it withdrew from a $2.1bn deal to buy US rival Cineplex.
Read more: Cineworld lands additional $250m lifeline as it prepares for re-opening
The two firms are now locked in a legal battle over accusations Cineworld breached its obligations to complete the deal.
Cineworld and AEW have been contacted for comment.
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