AUSTIN, Texas — According to a report from Variety Wednesday morning, Austin-based theater chain Alamo Drafthouse Cinema has filed for Chapter 11 bankruptcy protection, is in the process of being sold, and will close some underperforming locations.

What You Need To Know

  • Alamo Drafthouse filing for Chapter 11 bankruptcy

  • Austin-based theater chain to sell all assets

  • Some underperforming theaters will be closed

  • Company has already announced permanent closure of Alamo Drafthouse Ritz in Austin and Alamo Drafthouse Cinema Marketplace in New Braunfels

According to that report, bankruptcy is a condition of the sale to Altamont Capital Partners, a previous investor in the chain, as well as affiliates of Fortress Investment Group.

The transaction, the report indicates, involves “the sale of substantially all its assets.”

Variety states that according to the company theaters will continue to operate normally for the time being and that bankruptcy will allow it to gain the capital it needs to continue operating as it emerges from the COVID-19 pandemic.

Several theaters have been closed over the past year. Some remain closed, and others are open a few days a week.

According to the report Alamo Drafthouse founder Tim League will remain with the company and is part of the lender group purchasing the chain’s assets.

In addition to closing some locations, the report states, Alamo Drafthosue will restructure its lease obligations. The company is requesting a 75-day timeline for the transaction process and $20 million debtor-in-possession credit.

There are currently 41 Alamo Drafthouse locations across the U.S. In addition to the 21 located in Texas, there are theaters in New York, Colorado, Arizona, Missouri, Nebraska, California, Virginia, Minnesota and North Carolina. 

While it remains to be seen how many loctions will be closed, it was reported Wednesday that Alamo Drafthouse Ritz, which is located in downtown Austin, is one of the older theaters in the chain and has remained closed throughout the pandemic, will not reopen. 

A short time later, it was confirmed that the Alamo Drafthouse located in New Braunfels, Texas, will be closed as well.

-

Facebook Twitter