The pandemic has taken its toll on thousands of businesses. Due to prolonged theater closures caused by the COVID-19 pandemic, the highly regarded Texas-based theater chain Alamo Drafthouse has announced it has filed for Chapter 11 bankruptcy.
However, the bankruptcy filing does not mean Alamo Drafthouse is disappearing. Even though Alamo Drafthouse has indicated that it will be closing down some of its underperforming locations, at least it will not be closing all of them.
Under Chapter 11, the theater chain was purchased by previous investor Altamont Capital Partners, and new affiliates from the Fortress Investment Group. Alamo Drafthouse has told patrons that the cinema will continue to operate as normal, indicating that the bankruptcy and purchase was necessary to gain enough capital to keep the chain afloat during the remainder of the pandemic. Founder Tim League will also remain heavily involved with Alamo Drafthouse and was actually one of the members of the lender group that is buying the assets.
CEO Shelli Taylor said in an official statement, “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.”
What do you think of Alamo Drafthouse filing for bankruptcy? Do you think other theater chains will follow suit?