Alamo Drafthouse files for Chapter 11 bankruptcy.
The Alamo Drafthouse movie chain, which operates some 40 locations across the country and is known for its curated screenings, high food and drink options and excessive interactions with fans, said on Wednesday it was filing an application for Chapter 11 bankruptcy.
As part of this process, the company will sell its assets to its group of major lenders, including Altamont Capital Partners, subsidiaries of Fortress Investment Group and the company’s founder, Tim League.
The company said the move will provide it with the funding it needs to deal with the pandemic, which has taken a disproportionate impact on movie theater business. Many theaters across the country have been forced to close, at least temporarily, and movie studios have delayed the release of their blockbusters.
Alamo, which is based in Austin, Texas, is one of the most prominent movie chains seeking Chapter 11 protection during the pandemic.
“Due to the increasing availability of vaccines, a very exciting list of new releases and pent-up public demand, we are extremely confident that by the end of 2021, the movie industry – and our cinemas in particular – will be thriving, ”La Ligue said in a statement. “Having said that, these are tough times and during this bankruptcy we will have to make tough decisions about our lease portfolio. We hope our owner and other supplier partners will work with us to help ensure a successful exit from bankruptcy and viable future business. “
The downtown Alamo location in Austin, a 90-year-old movie palace known as the Ritz, will close permanently, as well as locations in Kansas City, Mo., and New Braunfels, Texas. Development at a proposed Orlando site will cease.
The company’s other sites that are operational plan to remain open during the restructuring. And plans to open a new location in Brooklyn remain on track, even if it won’t be ready on Friday, the day New York City said theaters can reopen.
Texas Governor Greg Abbott on Tuesday removed the state’s mask mandate and allowed businesses to open at 100% capacity. Alamo opposed the move, telling customers in a tweet that the company’s mandatory mask policy and six feet of social distancing would remain in place at its Texas locations.
“We are only following the advice of the CDC and medical experts, not politicians,” the company said.