Shareholders of Regal Entertainment Group (NYSE:RGC) received a special one-time $5.00 dividend yesterday, courtesy of a Delaware chancery court. The court threw out an injunction that had been filed by the Teachers Retirement System of Louisiana (TRSL), which was seeking to block payment of the cash windfall.

Perhaps emboldened by the California Public Employees' Retirement System's dogged pursuit of Walt Disney (NYSE:DIS), Bear Stearns (NYSE:BSC), and other companies it deemed had violated corporate governance standards, the Louisiana pension attacked perceived improprieties from Regal's board. In a statement issued by its legal team, TRSL asserted that "the misallocation of company assets appears to line the pockets of the majority owner at the expense of the rest of the shareholders."

Denver billionaire and Qwest (NYSE:Q) founder Philip Anschutz owns a 57% controlling stake in the nation's largest theater chain (with 78% of the voting interest) and stands to gain $368 million from the one-time dividend. I use the phrase one-time loosely, considering Anschutz profited handsomely from a similar arrangement just last summer, when a $5.05 special dividend boosted Regal's outstanding debt to $1.2 billion from $680 million. My own thoughts echo those penned at the time by Rick Munarriz.

While I'm certainly supportive of enhancing shareholder value through periodic tax-advantaged dividends, extraordinary payments representing the distribution of more cash than a firm earns in a year leave me skeptical that management couldn't find better ways to deploy that money other than decapitalizing the company. The $710 million special dividend payment nearly quadruples Regal's entire net income last year of $185 million.

Other companies such as Value Line (NASDAQ:VALU) and MGM Mirage (NYSE:MGG) are contemplating similar dividends, though theirs will be paid from cash. By contrast, Regal has less than $300 million on the balance sheet, and most of the payment will be financed through a restructuring of a $1.35 billion bank line of credit and the sale of $400 million in new subordinated notes. As a result of the transaction, both Moody's (NYSE:MCO) and McGraw-Hill's (NYSE:MHP) Standard & Poor's have revised their credit outlook for Regal from stable to negative. After the dust settles, pro-forma debt will have risen to more than $2 billion, while equity is reduced to $94 million from $1.3 billion.

Regal was formed several years ago from the merger of three bankrupt chains: Regal Cinemas, United Artists Theatres, and Edwards Theatres. The combined firm operates more than 6,000 movie screens, or nearly one in five domestic screens, and has a presence in 46 of the top 50 markets. The company seems to be doing just fine on its own, without the payment of two extraordinary dividends that will weaken the balance sheet and overtax the company's otherwise-healthy cash flow.

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Fool contributor Nathan Slaughter visited a Regal Cinema yesterday, though he owns none of the shares mentioned.