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TORONTO — A controversial decision banning a subsidiary of Alliance Communications from distributing feature films in Quebec has been reversed, the company announced earlier this week.

The Regie du cinema de Quebec withdrew Alliance Vivafilm’s distribution license last December, arguing that the film distribution decisions affecting Quebec’s cinemagoers actually originated in Toronto rather than Montreal, and therefore Alliance Vivafilm was violating Quebec’s Cinema Act.

The Montreal-based regulator was persuaded to reverse its decision after Alliance Vivafilm plumped up its Montreal office, appointing a new board and naming Guy Gagnon, the former Quebec head of Cineplex Odeon, its president.

It is a small world, though. After Alliance Vivafilm lost its distribution license, the company subcontracted its distribution business to Cineplex Odeon Films. Now that Cineplex Odeon has merged with Loews Theatres, Cineplex must, as a condition of receiving Industry Canada approval for the merger, unload its distribution arm, Cineplex Odeon Films. Alliance is rumored to be the most likely buyer.