(CelebrityAccess) — Texas-based dine-in cinema chain Alamo Drafthouse, announced on Wednesday it has filed for Chapter 11 bankruptcy protection, citing the effects of the coronavirus pandemic.
The bankruptcy comes as part of an asset purchase deal with Altamont Capital Partners and affiliates Fortress Group, providing space for Alamo to restructure its finances.
Alamo will continue operations during the reorganization, the company said, backed by a $20 million debtor-in-possession credit facility led by Altamont and Fortress.
However, as part of the reorganization, Alamo plans to shutter several underperforming locations of the roughly 40 outlets it operates around the U.S., including The Ritz in Austin, according to the Austin Statesman.
As well, Alamo Drafthouse founder Tim League will lead a new investor group to back the venture and will become executive chairman at the company, while Shelli Taylor, who previously led fitness conglomerate PF Partners will become CEO.
“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,” 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.