AUSTIN, Texas — Austin-based theater chain Alamo Drafthouse Cinema announced Wednesday it has filed for bankruptcy and will close two of its Texas locations.
The theater, founded in 1997 as a single-screen mom-and-pop repertory theater in Austin, Texas, filed for Chapter 11 as part of an asset purchase agreement with Altamont Capital Partners, a previous investor in the company, as well as affiliates of Fortress Investment Group.
The deal will provide the company with much-needed incremental financing to stabilize the business during the pandemic, which has had an unprecedented and outsized impact upon the movie theater and dining industries, according to a press release.
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“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,” said Alamo Drafthouse CEO Shelli Taylor. “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.”
Alamo Drafthouse officials said, "customers and employees can expect that the currently operating company-owned and franchise-operated theaters will be open for business in accordance with local guidelines."
However, three company-owned theaters will permanently close: Alamo Drafthouse Ritz in Austin, and locations in Kansas City, Missouri, and New Braunfels, Texas.
The Ritz, along with every other Alamo Drafthouse location, closed in March 2020 when the COVID-19 pandemic struck. Nearly half of the locations reopened in August 2020, but the ongoing financial impacts of the coronavirus are what led to the decision to permanently close the Ritz, the company said. On Alamo Drafthouse's website, the company posted its goodbye announcement to the Downtown Austin location, entitled "Au revoir to The Ritz."
"For nearly 13 years, The Ritz – the spiritual successor to our original location at 409 Colorado – has been the beating, fiery, cinephile heart of Alamo Drafthouse in Austin," the message read.
After opening that location in Downtown Austin 23 years ago, Alamo Drafthouse has grown to 41 locations and has been dubbed "the best theater in America" by Entertainment Weekly and "the best theater in the world" by Wired, according to the company's bankruptcy announcement.
“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,” said Tim League, Alamo Drafthouse founder and executive chairman. “We are fortunate to have an incredibly talented and passionate team who are eager to welcome our loyal fans back to our theaters for a cinematic experience that can’t be replicated. 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 Drafthouse said it will "continue to evaluate the health of all leases during the Chapter 11 process and make determinations about additional lease terminations in deciding which locations will be part of the go-forward business."
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