AUSTIN, TX (AP) — Alamo Drafthouse Cinemas Holdings, a Texas-based dine-in theater chain, said Wednesday that it has filed for bankruptcy and will enter a restructuring agreement due to financial woes during the pandemic.
The company plans to sell most of its assets to affiliates of Altamont Capital and Fortress Investment Group under Chapter 11 bankruptcy, which allows Alamo Drafthouse to continue operating while its managers and advisers work on repaying creditors.
“The transaction will provide the company with much-needed incremental financing to stabilize the business during the pandemic, which has had an unprecedented and outsized impact upon the movie theater and dining industries,” the company said in a statement. “More importantly, it will position Alamo Drafthouse to return to growth and continue executing on its long-term strategic vision.”
In its bankruptcy petition, Alamo Drafthouse listed assets and liabilities of as much as $500 million each. Court papers show that private equity firm Altamont Capital Management owns 40% of the company.
Alamo Drafthouse, like many others in the entertainment industry, has been facing a rough year since the pandemic began forcing many businesses to temporarily and permanently close.
The cinema franchise is known for its superb picture and sound quality, food and beer menu. Tim League and his wife, Karrie, founded the chain in 1997 in Austin.
The Austin-based company has more than 40 theaters nationwide, including some in the Dallas-Fort Worth area and Kansas City, Missouri. Most of the company’s theaters closed last March but reopened in late summer 2020 with a detailed pandemic protocol plan.
Under the restructuring agreement, the Alamo Drafthouse Ritz in downtown Austin, along with theaters in New Braunfels and Kansas City, Missouri, will close permanently. All other theaters that are currently open will continue operating following local pandemic guidelines.