Alamo Drafthouse on Wednesday filed for Chapter 11 and sold all of its assets to its senior leadership group, including Altamont Capital Partners and funds managed by affiliates of Fortress Investment Group. Alamo founder and executive chairman Tim League and other original investors are also among the buyers.
The restructuring arrangement and bankruptcy, which was filed in Delaware bankruptcy court, will give Alamo incremental financing to help it operate through the pandemic, just as theaters in New York City are primed to open at limited capacity. According to the filing, Alamo’s estimated assets are between $100 million and $500 million, as well as its estimated liabilities.
Founded in 1997 in Austin, Texas, the indie cinema chain expanded to 41 locations nationwide, including recently in downtown Los Angeles. As part of the restructuring, two Texas theater locations and one in Kansas City, Missouri are set to be closed. Development on another in Orlando, Florida, will be “permanently ceased.”
“Alamo Drafthouse had one of its most successful years in the company’s history in 2019 with the launch of its first Los Angeles theater and box office revenue that outperformed the rest of the industry,” Alamo Drafthouse CEO Shelli Taylor said in a statement. “We’re excited to work with our partners at Altamont Capital Partners and Fortress Investment Group to continue on that path of growth on the other side of the pandemic, and we want to ensure the public that we expect no disruption to our business and no impact on franchise operations, employees and customers in our locations that are currently operating.”
League predicted a comeback for the chain, which has won a loyal following for its premium in-theater dining and its “no talking” policies to improve the moviegoing experience. “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,” League said. “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.”
But like many exhibitors, Alamo has been battered by the pandemic and the widespread closure of theaters. Early on, the chain was quick to institute a mask mandate at locations that were allowed to remain open. Just this week as Texas lifted its statewide requirement on masks, Alamo stood firm and said that masks would still be required in its theaters.
Alamo had also offered patrons to rent out an entire theater and screen certain movies, both new and old, as a way of providing a safer viewing option during the pandemic, a model that other theater chains followed.
Pamela Chelin contributed to this report.