The bankruptcy filing is part of an asset purchase agreement with Altamont Capital Partners and affiliates of the Fortress Investment Group.
I don’t have a fancy business degree, but I know it’s difficult to keep a business closed for a year due to a pandemic. While major networks have been able to weather the pandemic, it appears the Alamo Drafthouse has now filed for Chapter 11. While that may seem terrible on the surface, a reading on VarietyThe story looks more like an attempt to restructure the company and give it the capital it needs to continue operating.
The deal involves Altamont Capital Partners, a previous investor in Alamo, along with affiliates of Fortress Investment Group. Variety reports that the deal involves “the sale of substantially all of its assets” and, as part of the bankruptcy, “Alamo Drafthouse will close some underperforming locations and restructure its lease obligations. The company is requesting that the bankruptcy court approve a 75-day period for the transaction process and the credit line for the debtor in possession of $ 20 million directed by Altamont and Fortress ”.
In a statement, CEO Shelli taylor, who became the company’s chief executive officer last April, said: “The Alamo Drafthouse had one of its most successful years in company history in 2019 with the launch of its first theater in Los Angeles and the box office revenue. that outperformed the rest of the industry. ” adding that, “We are excited to work with our partners at Altamont Capital Partners and Fortress Investment Group to continue on that growth path on the other side of the pandemic, and we want to assure the public that we do not expect any disruption to our business and any impact on franchise operations, employees and customers at our locations that are currently operating. ”
So what does this mean for the average consumer? For starters, it means your favorite location may close, as we found out this morning that the Alamo’s downtown Austin location, The Ritz, will be closed permanently. But it is premature to say that this is the end of the whole chain. Alamo has great customer loyalty, and Taylor was hired in part because of her experience expanding Starbucks. I’ve said in the past that I don’t think streaming is the future of going to the movies simply because we’ve lived through a year of that existence and it pales in comparison to the community experience of going to the movies. If Alamo can get on the other side of this pandemic, I think they will prosper because they have always shown how much they value that experience.
With that said, I am deeply saddened by the employees who have been suspended and now there may not even be a place to return to. The pandemic has brought us all ill, but some did worse than others. I hope those employees get back on their feet sooner rather than later.
“The show did not do to Cinemax what it was intended to do.”
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