Alamo Drafthouse Declares Bankruptcy Due to Pandemic, Closes Three Theaters
Alamo Drafthouse Cinema Holdings, an Austin-based nationwide chain of dine-in movie theaters, announced Wednesday that it has voluntarily filed for bankruptcy, the Austin American-Statesman reports. At the same time, the theater company entered a purchase agreement for the sale of its assets to a senior lending group that includes Altamont Capital partners, which currently owns 40% of the company, Fortress Investment Group and Tim League, Alamo Drafthouse co-founder and executive chairman. Alamo listed assets and liabilities of up to $500 million each in the bankruptcy petition, according to the Associated Press.
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League and his wife Karrie founded the concept theater chain in 1997, pioneering the dinner-and-a-movie model. The company also has merchandising and film preservation arms, the Statesman reports. Pre-pandemic, Alamo Drafthouse owned 36 cinemas in 22 markets across 10 states. In April 2020, Alamo Drafthouse appointed Shelli Taylor, a former Starbucks executive, as CEO, with League taking on the role of executive chairman, according to the Statesman.
Coming off one of its best years ever in 2019, the company took steps in 2020 and 2021 to mitigate the financial woes caused by closures during the pandemic. It held an auction of movie posters from League’s private collection in late 2020, with funds going toward paying staff and managing debt and expenses while the theater was closed. In an effort to make ends meet during the pandemic, the company also launched a streaming platform, Alamo on Demand, and took its annual film festival, Fantastic Fest, digital.
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However, rent costs continued to pile up, reported the Statesman, ultimately resulting in a lawsuit filed by Mueller Aldrich Street seeking more than $1 million in damages.
To date, Alamo has closed its New Braunfels and Kansas City, Missouri, locations, as well as the Alamo Drafthouse Ritz in downtown Austin, the Statesmen reports. The Alamo Drafthouse Mainstreet in downtown Kansas City has historical status as a centuries-old theater that was renovated in 2019 to merge historic style with modern movie-going amenities and the trendy dine-in theater concept.
The company will continue to evaluate leases to determine which locations will stay open post-pandemic. “Because of the increase in vaccination availability, a very exciting slate of new releases, and pent-up audience demand, we’re extremely confident that by the end of 2021, the cinema industry — and our theaters specifically — will be thriving,” League said in a written statement reported by The New York Times.
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This article originally appeared on GOBankingRates.com: Alamo Drafthouse Declares Bankruptcy Due to Pandemic, Closes Three Theaters
