[May 16, 2008]

Christal Films Distribution Inc. obtains creditor protection under the Companies' Creditors Arrangement Act

(Canada Newswire English Via Acquire Media NewsEdge) Attention News/Entertainment Editors

MONTREAL, May 16 /CNW Telbec/ - Christal Films Distribution announced that it has obtained creditor protection under the Companies' Creditors Arrangement Act (Canada)("CCAA") from the Qu?bec Superior Court. The issued order seeks to protect Christal Films Distribution from its creditors and allows the restructuring of its activities. The order will be in force for a 30-day period.

In the past months, many efforts were undertaken to reorganise the business, which was confronted by financial difficulty. Christal Films Distribution decided to take this action as the best alternative in the interests of the company, its employees, customers, creditors and other stakeholders. By virtue of the order issued by Justice Robert Mongeon of the Superior Court of Quebec, Raymond Chabot Inc. is the court appointed Monitor for the CCAA proceedings and will monitor Christal Films Distribution's ongoing operations, assist with the development and filing of a plan of arrangement with its creditors and other stakeholders, liaise with creditors, customers and other stakeholders and report to the Court.

The Difficult Context of Film Distribution

"Today's order is the result of the prevailing challenges facing the film distribution industry. Domestic and international markets are affected by the many changes within the film industry. Due to these circumstances, profit margins are becoming more limited", says Bertrand Langlois, Vice-President Finance at Christal Films Distribution. In this context, Christal Films Distribution has taken all the necessary measure in order to find and propose solutions to all stakeholders.

The CCAA protection stays creditors, suppliers and others from enforcing any rights against Christal Films Distribution and Christal Films Distribution will use the opportunity to restructure its affairs. Christal Films Distribution will continue operations in the ordinary course during the CCAA proceedings. Please note that Christal Films Production Inc. is not party to the legal proceedings.

Christal Films Distribution Inc. is a Canadian company focused on the distribution and broadcast of feature films in all media, including theatre, DVD and television. Founded in 2001, Christal Films Distribution is headquartered in Montreal.

M?lanie Joly, Cohn & Wolfe, (514) 386-4588; Manon Gauthier, Cohn & Wolfe, (514) 293-0822

Copyright ? 2008 Canada Newswire Ltd. All Rights Reserved.

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