Alamo Drafthouse Ownership Deal Proceeds as Bankruptcy Auction Is Canceled
Movie theater chain, which arranged a bankruptcy equity deal with Altamont and Fortress, received no rival bidsAn auction for Alamo Drafthouse has been canceled after no additional bids were received to take control of the movie theater chain.
The cancelation means Fortress Investment Group and Altamont Capital, can move ahead to take control of the company that filed for bankruptcy on March 3. Alamo founder and executive chairman Tim League and other original investors are also among the minority partners. Fortress is a new investor in the company while Altamont was a pre-existing investor before the chain’s nationwide closure amid the COVID-19 pandemic.
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Like many exhibitors, Alamo has been battered by the pandemic and the widespread closure of theaters, amassing $105 million in debt at the time of its bankruptcy filing. League had predicted a comeback for the chain, which has won a loyal following for its premium in-theater dining, selection of classic and off-beat genre screenings, and its “no talking” policies to improve the moviegoing experience.
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.” Altamont and Fortress, which have bought the majority of Alamo’s long-term debt from other lenders, will also provide $20 million in financing to allow the remaining locations to operate as Alamo hopes that a summer slate led by “Black Widow” and “In The Heights” will bring audiences back to their auditoriums.
The deal is similar to one finalized last week for fellow dine-in chain Studio Movie Grill, which slashed its debt by $100 million and received $25 million in liquidity as part of an equity deal with a group led by Goldman Sachs. As part of that deal, Studio Movie Grill will operate 20 locations, including a new one in Georgia, while shuttering 13 others. April also saw the announcement that ArcLight Cinemas and Pacific Theaters will not reopen, prompting intense interest in the chains’ high-profile locations in Southern California.
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