Alamo Drafthouse Cinema, the Texas theater chain that has become a favorite with cinephiles for its service and its leading approach to the show, has submitted chapter 11. The bankruptcy filing comes as part of an asset purchase agreement with Altamont Capital Partners, a former investor in the company, as well as subsidiaries of Fortress Investment Group, a new supporter. The company says operations will continue normally, and the Chapter 11 process and sale will provide the capital it needs to continue, as evidenced by a public health crisis that has left many of its locations closed for months. The agreement involves ‘the sale of almost all of its assets’.
Founder Tim League will remain involved with the company and is one of the lenders group buying the assets. League became the company’s CEO in April, with Shelli Taylor, a former Starbucks CEO, taking on the role of CEO. Alamo Drafthouse has about 40 locations and is headquartered in Austin, Texas.
As part of the bankruptcy, Alamo Drafthouse will underperform a few locations and restructure its lease obligations. The company is requesting that the bankruptcy court approve a 75-day timeline for the transaction process and the $ 20 million credit facility owned by Altamont and Fortress.
The coronavirus pandemic has slowed the exhibition industry, with large studios postponing big movies and theaters for months. However, there are signs that it is recovering. Cinemas can open in New York City from March 5 and exhibitors expect Los Angeles moviegoers to welcome back soon, and it could be the summer for a revival this summer as vaccinations increase.
Alamo Drafthouse attracted loyalists with its themed performances and fans of fans (such as staged weddings set on ‘Star Wars’ movies), as well as the strictly applied policy of not speaking.
“Alamo Drafthouse had one of its most successful years in the company’s history in 2019 with the launch of the first Los Angeles theater and box office revenue to outperform the rest of the industry,” Taylor said in a statement. “We are excited to continue on the growth path with our partners at Altamont Capital Partners and Fortress Investment Group on the other side of the pandemic, and we want to assure the public that we have no disruption to our business and no impact on franchise operations, employees and customers at our locations that are currently operating. ”