Toronto Theatre Tug-Of-War

A Toronto production company is in the midst of a bit of off-stage drama with the recent filing of a lawsuit to keep a rival company from purchasing two local theatres.

Dancap Productions is seeking an injunction to prevent U.S.-based Key Brand Entertainment, which purchased the Canon and Panasonic Theatres from Live Nation earlier this year, from selling those theatres to Ed Mirvish Enterprises, according to a statement.

Mirvish has reportedly offered as much as $35 million for the venues and signed, but not yet closed, a deal with Key Brand, the Globe and Mail reported.

But according to the suit, Key Brand’s attempt to sell the venues to Mirvish breached a contractual agreement it inked with Dancap last year.

Dancap alleges it provided an investment that was the "linchpin" that allowed Key Brand to acquire the theatrical assets of Live Nation.

The deal made Dancap president Aubrey Dan a director of Key Brand and CEO of its touring affiliate Broadway Across Canada.

It also gave Dancap "full authority to autonomously manage Key Brand’s Canadian assets, including the Canon and Panasonic theatres in Toronto, and final right to determine which productions would be shown and when."

However, it looks like an existing lease/management agreement that Mirvish held with Live Nation for the Canon Theatre prior to its sale to Key Brand has been a cause for confusion.

Mirvish reportedly held programming rights at the venue through 2016, and a first right of negotiation on its sale.

The suit contends that when the Canon Theatre was sold to Key Brand, the programming and management rights were transferred to Dancap, and it appears Key Brand agreed – to a point.

When the company presented Dancap with a management agreement that allowed Key Brand to terminate those management rights in the case of a sale of the theatres, Dancap balked, and Key Brand filed suit in California, the Globe and Mail said.

"Key Brand has long known of our interest in the Canon and Panasonic Theatres," Dan said. "We would never have invested had they disclosed a plan to sell these facilities and enter into agreements with Mirvish. We now have an obligation, to our customers and our business, to enforce our rights under our agreement."

Key Brand head John Gore told the Globe in a statement that the Dancap suit is "completely without merit. … We fully expect to prevail in this matter and to be able to proceed with the sale transaction."