Alamo Drafthouse files for bankruptcy — and some theaters will close for good

Dine-in movie theater chain Alamo Drafthouse has filed for Chapter 11 bankruptcy — and some of its theaters are slated to close.

The filing is part of an asset purchase agreement with previous investor Altamont Capital Partners as well as affiliates of Fortress Investment Group, KEYE reported.

“The transaction will provide the company with much-needed incremental financing to stabilize the business during the pandemic, which has had an unprecedented and out-sized impact upon the movie theater and dining industries,” the company said in a statement, per the Austin American-Statesman.

Alamo Drafthouse, which has about 40 locations across the U.S., said it will permanently close some “underperforming locations” as it restructures its leases, CNBC reported.

Three closures have been announced: the chain’s flagship Ritz location in Austin, as well as locations in New Braunfels and Kansas City, the American-Statesman reported.

The chain is also suspending development of a planned location in Orlando, according to KXAN. More locations could close down the line as the chain assesses the “health of all leases during the Chapter 11 process,” the outlet reported.

Like many movie theaters, the coronavirus pandemic has been tough on Alamo Drafthouse.

It forced temporary closures of Alamo Drafthouses across the nation, which resulted in debt, expenses and out-of-work staff, owner Tim League said last year.

Currently, only three of its locations are open, though they have cut back the number of movies they’re showing, according to KXAN.

In a statement, League said he was confident theaters would be thriving by the end of 2021, citing vaccine rollouts, new movie releases and “pent-up audience demand,” The Wrap reported.

He lauded his “talented and passionate team” adding, “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.”

In November, League announced he was auctioning off his personal collection of rare movie posters to help pay the chain’s staff following COVID-19 closures.

“100% of proceeds from the sale will go towards paying staff of the Alamo Drafthouse and paying debt and expenses accrued during the COVID closures,” League said at the time “These next four to six months are critical and the proceeds from this auction will help immensely.”

Alamo Drafthouse opened its first location in Austin in 1997. It became a hit with movie fans, making waves for melding restaurant-like service with the movie theater experience, delivering meals such as pizza, burgers and wings to movie-goers’ seats along with beer and cocktails.

This story was originally published March 3, 2021 at 10:41 AM with the headline "Alamo Drafthouse files for bankruptcy — and some theaters will close for good."