Alamo Drafthouse Files for Chapter 11 Bankruptcy Protection, Closes Ritz: Firm Commits to Continue Operations at All Remaining Sites – Screens

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Staying in the dark: Alamo Drafthouse has filed for Chapter 11 bankruptcy protection and announced that, as part of the proposed deal, its downtown Austin location, the Alamo Ritz , will be permanently closed. (Photo by John Anderson)

A blow and potential hope for fans at the Alamo Drafthouse this morning: The Austin-based movie chain filed a voluntary Chapter 11 filing with the United States Bankruptcy Court for the District of Delaware and will close several locations, including the beloved Ritz in Austin.

Sources close to the Drafthouse had suggested in recent months that the company was looking to restructure its debt, and in the filing, Alamo Drafthouse LLC told the court that it had entered into an asset purchase agreement with Altamont Capital Partners ( with whom they already have a long-standing relationship), funds managed by subsidiaries of Fortress Investment Group LLC and founder/executive chairman Tim League.

This is the latest measure to keep the Drafthouse running. He announced furloughs and layoffs last July, as part of a series of cost-cutting measures, while League sold his personal collection of prints from Drafthouse’s printing and sales arm, Mondo. , to help cover some costs. However, unlike many Chapter 11 filings, the new arrangement means the Drafthouse has refinancing lined up. Drafthouse spokespersons stressed that this means the channel will continue all operations at the remaining 38 sites, as well as continued operations of Mondo, the recently relaunched Drafthouse Films, and VOD platform Alamo on Demand.

This milestone comes after the Drafthouse had one of its most successful years in 2019, with the launch of its long-awaited Los Angeles location. However, as with any business, 2019 was not an indicator of 2020 and the pandemic shutdown. The Drafthouse was one of the first chains to close its cinemas and kept many of them in the dark, while those that reopened operated at reduced capacity and with few big exits to attract even limited audiences. .

Shelli Taylor, CEO of Alamo Drafthouse, said, “We are excited to work with our partners at Altamont Capital Partners and Fortress Investment Group to continue on this path of growth on the other side of the pandemic, and we want assure the public that we expect no disruption to our business and no impact on franchise operations, employees and customers at our currently operating locations.

League said it was optimistic the industry would recover by the end of 2021. “We are blessed to have an incredibly talented and passionate team who can’t wait to welcome our loyal fans to our theaters. for a replicated cinematic experience. That said, these are challenging times and during this bankruptcy we will have to make some tough decisions regarding our lease portfolio. We hope our landlord and other vendor partners will work with us to help ensure a successful exit from bankruptcy and viable future business.

Part of the deposit will be the ability to get rid of “unviable locations”. The listing today means the closure of Kansas City’s scandal-ravaged site, the New Braunfels Drafthouse, and Austin will lose the beloved Ritz on Sixth Street.

This morning the Drafthouse announced in a press release that its second downtown location, the successor to Colorado’s first Drafthouse site, will not reopen after it closed due to the pandemic last March. In its 13 years of operation, the historic theater has hosted many of the Drafthouse’s signature programs, such as Terror Tuesday and Weird Wednesday. However, it also provided a vital piece of Austin’s festival infrastructure, providing a regular screening and event venue for SXSW. Austin Film Festival and ATX Television Festival.

The departure of the Drafthouse raises questions about the future of the historic venue, which opened in 1929 as The Ritz, Austin’s first movie theater designed specifically for talkies. Since then it has been an adult theatre, music venue, theatre, adult cinema again, punk club, before finally being restored to a cinema by the Drafthouse in 2007.

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