It looks increasingly likely AMC Theatres is inching toward a bankruptcy filing. Saturday afternoon, reports surfaced suggesting the country's biggest theatre chain was in talks to hire Weil, Gotshal & Manges to direct the company through a Chapter 11 bankruptcy filling, allowing the chain to remain open for business while restructuring debt. The report, published by the New York Post, suggests the same law firm was hired by PG&E, Fairway supermarkets, and Sears to navigate similar circumstances for the fledgling corporations.
"You don’t hire Ray unless you are filing,” the Post's source tells the tabloid. “You are not going to hire them at their hourly rate to have a beer with them.”
That "Ray" refers to Ray Schrock, the attorney responsible for helping organize the bankruptcy filings for the aforementioned companies.
As the coronavirus pandemic began to spread across the United States movie theatres were one of the first industries to completely shutter. With the close-quarter gatherings that come with going to the movies, virtually all theatres — AMC, Cinemark, Regal, Alamo Drafthouse, and the like — decided to shutter to promote best social distancing practices. At one point, AMC chief executive Adam Aron revealed he expected the chain to be back up and running in June.
"We said we expected to be shut for six to 12 weeks," Aron said in an interview with CNBC last month. "That would be May 1 to mid-June. That might be more the right timing... I think if we learned anything in the last two weeks is people just so want to get out of their houses. I think we’re all feeling cooped up and want to get out and have life return to normal."
AMC has since furloughed nearly all of its 25,000 employees and shut all of its 630 locations in the country. It was reported earlier this week the chain was drowning in nearly $5 billion in debts unable to be paid with virtually no cash flowing in.
Shortly after the pandemic began spreading across this country, China briefly reopened its theatres — a sign that the pandemic might be ending sooner than thought. The country then reclosed theaters days later and they're still closed today.
Cover photo by Victor J. Blue/Getty Images
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