2020 was a difficult year for many businesses, especially movie theaters, and 2021 isn't getting off the best start for those businesses either. Granted, there's light at the end of the tunnel now with vaccines starting to roll out, but it's still going to be a tough year for theaters, including the Texas-based Alamo Drafthouse Cinema, which offers dine-in services and comfortable and spacious seating to customers. The chain has filed for Chapter 11, and the bankruptcy filing is part of an asset purchase agreement with Altamont Capital Partners and affiliates of Fortress Investment Group (via Variety). Fortress is a new backer, but Altamont is a previous investor, and the agreement includes "substantially all its assets" according to the filing.
Alamo Drafthouse says that operations will continue as normal and that the Chapter 11 process and sale will give it the capital needed to stay open and continue those operations. The pandemic has left many of its 40 locations closed, and hopefully, as things improve throughout the year those locations can reopen safely and with the necessary funding.
Founder Tim League will stay with the company and is part of the lender group-buying Alamo's assets. He became the company's executive chairman in April, while Shelli Taylor is currently running the company as CEO. Part of the agreement is to close down several underperforming locations and restructure lease obligations, and Alamo Drafthouse is requesting the Bankruptcy Court to approve a 75-day timeline for the transaction process and $20 million debtor-in-possession credit facility by Altamont and Fortress.
“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,” Taylor said. “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.”
While many theaters are still closed, theaters can open in New York starting on March 5th, and that might be the case for Los Angeles sooner than later as well, bringing back two of the movie industry's biggest stateside markets. Hopefully, this is the beginning of better times for Alamo Drafthouse.