Alamo Drafthouse Cinema, the quirky theater chain known for its craft beer and strict no text messaging policies, has filed for Chapter 11 bankruptcy protection over the COVID-19 pandemic

The Austin, Texas-based company announced Wednesday that it will sell its assets to a group of senior creditors, including private equity firms Altamont Capital Partners and Fortress Investment Group. Also includes the founder of Alamo Drafthouse, Tim League

This doesn’t mean Alamo Drafthouse is going out of business In a statement, the company said the deal will provide it with capital to stabilize, including $ 20 million in debtor-owned financing, “More importantly that Alamo Drafthouse will be able to return to growth and continue to deliver on its long-term strategic vision, “said the chain
However, three theaters will be permanently closed: Alamo Drafthouse Ritz in Austin and locations in Kansas City, Mo.and New Braunfels, Texas In addition, development of a location in Orlando, Florida will cease permanently

There are still plans to reopen the downtown Los Angeles location, which opened at the Bloc mall in 2019, if allowed, an Alamo Drafthouse spokesman said

League, who founded Alamo Drafthouse with a one-screen Austin repertory theater with his wife Karrie in 1997, went optimistic in a statement about the company’s future, citing nationwide vaccination efforts and pent-up demand Going to the movies recognized the challenges

“We are extremely confident that the cinema industry – and our theaters in particular – will flourish by the end of 2021,” said League, the chairman of the board. “That means these are difficult times and during this bankruptcy we will have to make difficult decisions about our leasing portfolio meet ”

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The Delaware filing for bankruptcy comes because multiplexes across the country continue to struggle due to widespread theater closings, the lack of new blockbusters from Hollywood, and the reluctance of many moviegoers to return to theaters, according to Comscore, only about 42 % of theaters open in North America

AMC Entertainment, owner of the world’s largest cinema footprint, has held off bankruptcy multiple times during the pandemic by raising money from Wall Street’s Dallas-based dine-in-circuit Studio Movie Grill filed for protection from October Creditors under Chapter 11

Reddit-inspired retail investors took AMC stock on a wild ride earlier this year after propelling GameStop’s stocks up in theater chain stocks like Cinemark, AMC and Imax Corp. have risen in recent months in light of renewed optimism about a possible recovery

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The privately owned Alamo Drafthouse has 41 locations, of which 18 are company owned and 23 are franchises.The chain has a loyal following and has themed demonstrations, including the Terror Tuesday program

The outspoken corporation often weighs industry-related controversy on Tuesday, the Alamo Drafthouse said its theaters will continue to require masks and social distancing for its patrons despite the Texas government, Greg Abbott’s attempt to end the state’s mask mandate

“We only follow the instructions of the CDC and medical experts, not the policy,” said the company

In a statement, Matthew Vonderahe, Alamo Drafthouse’s chief financial officer, said the company was in good shape ahead of the pandemic despite the challenges facing the motion picture industry

Domestic box office fell 5% in 2019 due to factors such as the surge in popularity of streaming movies. “Alamo’s business posted its strongest performance to date, outperforming the industry by over 5%, largely due to its ability to program films without a tent pole “said Vonderahe

But pandemic health logs have weighed on business. Six of the company’s 18 company-owned locations are operating with a 50% capacity cap and “less than 20% at the box office at these locations,” Vonderahe said

In April 2020, the company received a loan of 10 million under the U USD under the Paycheck Protection Program S. Government Coronavirus Economic Relief Plan The company has requested partial debt relief to protect jobs
Alamo Drafthouse’s bankruptcy filing lists assets between $ 100 million and $ 500 million and liabilities between $ 100 million and $ 500 million It has at least 200 creditors

League stepped down as chief executive in April, making way for Shelli Taylor, formerly president of United Planet Fitness Partners, to become its new chief

Ryan Faughnder is a film reporter for the Los Angeles Times Company Town and covers the most important Hollywood studios, including Walt Disney Co. Previously, he wrote for the Los Angeles Business Journal and Bloomberg News. He has a Masters in Journalism from USC’s Annenberg School and a BA in English from UC Santa Barbara

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Alamo Drafthouse

World News – USA – Theater chain Alamo Drafthouse files for Chapter 11 bankruptcy amid pandemic problems

Source: https://www.latimes.com/entertainment-arts/business/story/2021-03-03/alamo-drafthouse-theater-chain-files-for-chapter-11-amid-pandemic-woes