Austin-based dinner-and-a-movie chain Alamo Drafthouse has filed for bankruptcy, becoming one of the latest companies facing financial hardships during the pandemic.
The theater chain, known for its dine-in movie experiences, filed for Chapter 11 on Wednesday, in anticipation that a buyer could allow it to continue operating its 40-plus U.S. cinema locations as it works to pay back debt.
“The transaction 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. More importantly, it will position Alamo Drafthouse to return to growth and continue executing on its long-term strategic vision,” the company said in a statement obtained by FOX Business.
The Chapter 11 filing is part of a purchase agreement with Altamont Capital Partners, a former investor in Alamo Drafthouse, and Fortress Investment Group, the company said.
Alamo Drafthouse said the bankruptcy filing will also allow it to close unprofitable locations and restructure lease obligations to set it up for future growth.
The company, meanwhile, says it has three new franchises slated to open this year, though its theaters in Austin, Kansas City, Orlando and New Braunfels, Texas, will be permanently closed.