The coronavirus pandemic has forced Alamo Drafthouse into bankruptcy.
The Alamo Drafthouse, known for its quiet zones, movie-themed treats, and film parties, is now in hot water after suffering a major blow during the coronavirus pandemic. The Texas-based movie theater chain filed for Chapter 11 and was sold to one of its previous investors, Altamont Capital Partners, and affiliates of a new backer, Fortress Investment Group.
The company confirmed that operations will continue as normal and the Chapter 11 filing and sale will allow the theaters to gain enough capital to continue under the restrictions of the coronavirus pandemic.
"Alamo Drafthouse had one of its most successful years in the company’s history in 2019 with the launch of its first Los Angeles theater and box office revenue that outperformed the rest of the industry," the company's executive chairman, Shelli Taylor said in a statement. “We’re excited to work with our partners at Altamont Capital Partners and Fortress Investment Group to continue on that path of growth on the other side of the pandemic, and we want to ensure the public that we expect no disruption to our business and no impact on franchise operations, employees and customers in our locations that are currently operating."
However, as part of the bankruptcy, the Alamo Drafthouse will close some of its underperforming locations and start to restructure its lease obligations. The original Alamo Drafhouse Ritz in Austin is one of the theaters that did not make the cut and will be closing its doors permanently. Other theaters include the Alamo Drafthouse in Kansas City, Missouri, and in New Braunfels, Texas. Despite the closures though, plans to open a new location in Brooklyn are still on track.
The coronavirus pandemic has been hard on the entertainment industry, and especially damaging for movie theaters. However, Alamo founder Tim League remains hopeful for the future of the company.
"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. "We are fortunate to have an incredibly talented and passionate team who are eager to welcome our loyal fans back to our theaters for a cinematic experience that can’t be replicated. That said, these are difficult times and during this bankruptcy, we will have to make difficult decisions about our lease portfolio. We are hopeful that our landlord and other vendor partners will work with us to help ensure a successful emergence from bankruptcy and viable future business."
League will remain involved with Alamo Drafthouse and is in the lender group that will be buying the company's assets. Alamo Drafthouse requested approval for a 75-day timeline from the bankruptcy court for the sale of their assets. They plan to be back and running in no time and want to be prepared to open as soon as they are given the green light.
How do you feel about the sale of Alamo Drafthouse? Are you planning to go back to the movies once theaters are open? Let us know in the comments.