The company is working on 8 to 10 long-term leases or management agreements with landlords to operate vacant movie theaters. Cinergy Entertainment, a Dallas-based company that has six venues it has built from the ground up, is changing up its business plan. One small movie theater operator is seeing a rare opportunity for growth during the pandemic-disrupted economy. Movie theater venues are hurting from capacity limits, competition from streaming services, as well as Hollywood holding out on releasing new movies in theaters until the end of 2021 or further into 2022. Strauss law firm who is not involved in the Studio Movie Grill bankruptcy case but is familiar with retail bankruptcy cases.
The debt-equity swap is a “highly risky” option and puts creditors as the new owners of the company, which has an uncertain operating future in light of the pandemic, said Eric Horn, an attorney at A.Y. Without any bidders, the auction for Studio Movie Grill, which had 37 venues across the country before the coronavirus struck, has been called off and the Dallas-based company plans to pivot and negotiate with creditors on a possible debt-equity swap, according to court documents filed this week in the Bankruptcy Court for the Northern District of Texas. Studio Movie Grill, the first high-profile movie theater operator to file for Chapter 11 bankruptcy protection during the pandemic, has not found a buyer for the dine-in movie chain as the industry struggles with fewer customers. It is reprinted here with permission from CoStar News.
This article originally appeared in CoStar News written by Candace Carlisle on Februquoting Eric Horn. Dine-In Movie Theater Chain’s Exit of Some Leases Could Benefit Rival Operators, Executive Says
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