Texas-based theater chain, Alamo Drafthouse, has filed for Chapter 11 bankruptcy. The filing comes along with an asset purchase agreement with Altamont Capital Partners, a previous investor in the company. A new backer, Fortress Investment Group, and its affiliates are also a part of the purchase agreement.
Chapter 11 does sound like doom and gloom for the theater chain that became a big hit with moviegoers due to its focus on the movie fans and their dine-in service but this filing will give the chain the capital it needs to allow operations to run as normal as they emerge from the ramifications of the COVID-19 pandemic. Like most exhibitors, Alamo Drafthouse locations were closed for months beginning last March.
Alamo Drafthouse is headquartered in Austin, Texas, and runs roughly 40 locations with other prominent locations being Los Angeles, Brooklyn, and Northern Virginia. As part of the bankruptcy filing, Alama Drafthouse will close down a few underperforming locations and restructure their lease obligations. There is no word as of yet which locations will be closed due to the filing. Founder Tim League will remain involved with the company and among the lender group buying assets and Shelli Taylor, who will be assuming the role of CEO, had this to say about the latest turn of events:
“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. 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.”
The news about Alamo Drafthouse comes on the heels of what could be a return to semi-normal theater operations just around the corner. Shuttered theaters in New York City are set to reopen on March 5, 2021, and Los Angeles is reportedly mere weeks from announcing that their theaters will be reopening as well, albeit, at limited capacity. Many exhibitors believe that there will likely be a revival of moviegoing by the summer as vaccinations continue to increase. Oddly enough in Texas, where Alamo Drafthouse is headquartered, the mask mandate was just lifted and they reopening their state at 100 percent capacity.
Alamo Drafthouse is known for its love for cinephiles and its focus on the pure theatrical experience. They have hosted numerous fan events that are movie-related and they are known for enforcing rules, such as “no talking”, with a much stricter policy than other chains. I’m happy that this filing allows them to operate as normal but bummed for the underperforming locations that will have to close in the near future. There is the concern that the new partners involved may try to change things down the line but that’s something we’ll have to wait and see. The pandemic has certainly kneecapped the exhibition business but hopefully, all of these signs of reopening are an indication that they’re coming out on the other side of it.
Are YOU a fan of Alamo Drafthouse? Is there one in YOUR area?