Alamo Drafthouse filed for Chapter 11 bankruptcy on Wednesday March 3rd after having the majority of its 40 locations closed for almost a year due to the Coronavirus pandemic.
While the company will continue to operate under their new normal during the bankruptcy proceedings, it is clear that at least several underperforming location will permanently close, including their original downtown Austin location located in a 90 year old movie theater known as the Ritz.
Additional permanently closing locations include Kansas City, New Braunfels, TX and a site in development in Orlando. They have said that their plans to open a new location in Brooklyn are still on track and will happen.
It has been released that the company will sell the majority of its assets to Altamont Capital Partners, a previous investor, as part of the proceedings. The purchase agreement also includes Fortress Investment Group and Tim League, founder and Executive Chairman of Alamo Drafthouse.
Shelli Taylor, Alamo’s CEO, said that ““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.”
Alamo Drafthouse had its most successful year in 2019, prior to the pandemic. The chain has also outpaced many of its other theater competitors posting record box office numbers during major releases. “We’re extremely confident that by the end of 2021, the cinema industry — and our theaters specifically — will be thriving,” League said in a statement.
While bankruptcy can often be a bad sign for businesses, it seems like Alamo Drafthouse is poised for a strong comeback once things begin returning to normal. The proceedings are providing the business with the capital needed to weather the storm.