Alamo Drafthouse Cinemas Holdings LLC, a theater chain offering moviegoers seat-side food service, beer and themed cocktails, has filed for bankruptcy while planning to sell the business to Fortress Investment Group LLC and other investors.
Austin, Texas-based Alamo became the latest theater business forced into chapter 11 as a result of seismic changes to the movie industry during the Covid-19 pandemic. Cinemas across the U.S. either remain closed or are operating at reduced capacity while major film studios either delay or bypass theater releases in favor of streaming services.
Alamo, which operates 41 company-owned and franchised cinemas, temporarily shut its locations last March and put in place a number of cost-saving measures to withstand the pandemic, including furloughing most staff. The company came up with ways to generate revenue as well, including renting out theaters for private screenings and launched a video-on-demand platform called “Alamo On Demand.”
Despite these steps, a cash crunch continued throughout 2020 amid unprecedented industry conditions, Alamo Chief Financial Officer Matthew Vonderahe said in a declaration filed Wednesday in the U.S. Bankruptcy Court in Wilmington, Del.
The cinema chain got a $10 million coronavirus relief loan through the federal Paycheck Protection Program, court papers said, one of the hundreds of companies that have filed for bankruptcy after receiving the emergency lifeline.
