The Alamo Drafthouse theater chain, which operates some 40 locations across the country and is known for its curated screenings, elevated food and drink options and over-the-top fan interactions, announced Wednesday that it was filing for Chapter 11 bankruptcy protection.
As part of the process, the company will sell its assets to its senior lender group, including Altamont Capital Partners, affiliates of Fortress Investment Group and the company’s founder, Tim League.
The company said the move would provide the company with the financing needed to weather the pandemic, which has had an outsize impact on the movie theater business. Many theaters across the country have been forced to close, at least temporarily, and movie studios have delayed their blockbuster releases.
Alamo, which is based in Austin, Texas, is one of the most prominent movie chains to seek Chapter 11 protection during the pandemic.
“Because of the increase in vaccination availability, a very exciting slate of new releases and pent-up audience demand, we’re extremely confident that by the end of 2021, the cinema industry — and our theaters specifically — will be thriving,” Mr. League said in a statement. “That said, these are difficult times and during this bankruptcy we will have to make difficult decisions about our lease portfolio. We are hopeful that our landlord and other vendor partners will work with us to help ensure a successful emergence from bankruptcy and viable future business.”
Alamo’s downtown Austin location, a 90-year-old movie palace known as the Ritz, will close permanently, along with locations in Kansas City, Mo., and New Braunfels, Texas. Development at a proposed site in Orlando will cease.
The company’s other locations that are operational plan to remain open during the restructuring. And plans to open a new Brooklyn location remain on track, though it won’t be ready on Friday, the day that New York has said movie theaters can reopen.
On Tuesday, Gov. Greg Abbott of Texas eliminated the state’s mask mandate and allowed businesses to open at 100 percent capacity. Alamo pushed back against this decision, telling patrons in a tweet that the company’s mandatory mask policy and six feet of social distancing would remain in place at its Texas locations.
“We are only following the guidance of the C.D.C. and medical experts, not politicians,” the company said.
