Pacific Theatres Files for Bankruptcy
Pacific Theaters, which includes ArcLight Cinemas, announced Friday that it will liquidate its assets under Chapter 7 of the bankruptcy code, ending the company’s 75 years in the operating industry.
But the bankruptcy filing also hinted that part of the Forman family’s theatrical empire will survive. The Decurion Corporation – the parent company of Pacific Theaters – reached an agreement last November in which it retained the right to use the ArcLight and Pacific trademarks at ArcLight Hollywood and the Cinerama Dome – a strong indication that Decurion has the intends to reopen the site.
Now led by third-generation CEO Chris Forman, the Decurion Corporation still owns the ArcLight Hollywood and the Dome. Decurion is not part of the bankruptcy filing, and the substantial real estate of the Forman family is unlikely to be affected by the Pacific Theaters bankruptcy.
Pacific Theaters announced in April that it would not reopen, after its 17 sites were closed for more than a year due to the pandemic. Decurion owns the property at just two of the locations – Hollywood and Chatsworth.
Most of the remaining 15 locations will likely be leased to new operators in the near future. Variety reported earlier this week that AMC was close to finalizing a deal for the Grove and Americana theaters in Brand malls.
According to the bankruptcy filings, the six entities that filed for bankruptcy on Friday had $ 69 million in liabilities and only $ 4.8 million in total assets. The only secured debt is a $ 6.4 million obligation to Bank of America, which means all unsecured creditors – including owners, tax authorities, former employees, vendors, various litigants, and holders of gift cards – will likely end up with little or nothing.
Unsecured creditors also include all of the major movie studios, as well as many smaller distributors, which still owed box office revenue when Pacific theaters closed last year. Disney owes $ 1.26 million, followed by Warner Bros. ($ 779,000), Universal ($ 619,000), Paramount ($ 501,000), Sony ($ 389,000) and independent distributor Neon ($ 231,000). In total, 25 distributors owe $ 4.26 million.
Among the assets reported by debtors were theater furniture and projectors, although most are no longer under the company’s control, as well as ArcLight’s websites and customer lists. The company revealed that it generated $ 175.2 million in revenue in 2019, which reached $ 25.7 million in 2020.
The most notable disclosure concerns the November transaction between Pacific and parent company Decurion. According to the record, Decurion paid Pacific Theaters $ 10.5 million to terminate its lease on the property. Pacific turned around and gave most of the money to Bank of America to pay off the debt. As part of the transaction, Pacific and ArcLight Cinemas granted Decurion “certain intellectual property licenses” and agreed not to operate under the Pacific and ArcLight brands in the Hollywood region.
In other words, if another operator took control of Pacific and ArcLight for the purpose of relaunching the brands, that company would not be allowed to open a theater under those names in Hollywood, as it would compete with Decurion. Variety reported Tuesday that industry sources said they expected Chris Forman to restore and reopen the Hollywood site.
The Decurion spokesperson declined to comment on the November transaction.
“After a year of devastating impact from the pandemic, Pacific Theaters Exhibition Corporation announced in April that it would not reopen its ArcLight Cinemas and Pacific Theaters locations,” the company said in a statement Friday. “After taking steps to liquidate the business, the company is now seeking Chapter 7 protection of the Bankruptcy Code in order to liquidate its remaining assets for the benefit of its creditors.”
The statement continues, “We are deeply grateful to our employees, guests and the film community for coming together over the past decades to create so many wonderful film experiences. We are overwhelmed by the extraordinary outpouring of memories. Thanks for sharing this with us. We will all miss you.
There are over 25,000 signatories on a Change.org campaign to “save” the Cinerama Dome.
Meanwhile, Regal Cinemas signed a lease to occupy the former ArcLight Cinemas space of the Sherman Oaks Galleria, which closed in April 2021. A press release says the new Regal Cinema will open shortly and undergo a complete renovation after opening. The remodel will install three premium format cinemas, including IMAX, 4DX and ScreenX, and will include a VIP section with luxury seating and an upgraded menu.
“We are pleased to add the excellent location of Sherman Oaks Galleria to our tour,” said Mooky Greidinger, CEO of Cineworld, parent company of Regal. “We plan to open the cinema as soon as possible and start renovating the location to be in line with our strategy of providing our customers with ‘the best place to watch a movie’.”