Alamo Drafthouse Files for Chapter 11, Announces Sale to Altamont Capital, Fortress Investment

Authored by variety.com and submitted by yam12

Alamo Drafthouse Cinema, the Texas-based theater chain that has become a favorite with cinephiles for its dine-in service and fan-forward approach to exhibition, has filed for Chapter 11. The bankruptcy filing comes 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, a new backer. The company says that operations will continue as normal and the Chapter 11 process and sale will give it the capital it needs to continue operating as it emerges from a public health crisis that left many of its locations closed for months. The agreement involves “the sale of substantially all its assets.”

Founder Tim League will remain involved with the company and is among the lender group buying the assets. League became the company’s executive chairman in April, with Shelli Taylor, a former Starbucks executive, assuming the role of CEO. Alamo Drafthouse runs roughly 40 locations and is headquartered in Austin, Texas.

As part of the bankruptcy, Alamo Drafthouse will close down a few underperforming locations and restructure its lease obligations. The company is requesting that the bankruptcy court approve a 75-day timeline for the transaction process and the $20 million debtor-in-possession credit facility led by Altamont and Fortress.

The coronavirus pandemic has decimated the exhibition business, with major studios postponing blockbusters and theaters remaining shuttered for months. However, there are signs it is rebounding. Cinemas can open in New York City starting on March 5 and exhibitors expect that Los Angeles will soon welcome back moviegoers, potentially setting the stage for a revival this summer as vaccinations increase.

Alamo Drafthouse has attracted loyalists with its themed screenings and fan events (such as staged weddings timed to “Star Wars” movies), as well as its strictly enforced “no talking” policy.

“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.”

engineered_academic on March 3rd, 2021 at 14:47 UTC »

I spent so much time at Alamo Drafthouse in the past before I moved out of Virginia. I was at the top-tier of their rewards program. I really hope they don't change what made the Drafthouse special. My only "bad" experience was watching A Quiet Place in a theater where nobody was talking and it was absolutely silent except for the sound of a hundred of people chewing. That was more revolting than the movie was scary.

I didn't know about the behind the scenes treatment of staff at the time, but I hope the Drafthouse or something still like it exists in a better state for employees in the future. I highly doubt that by purchase with one of these "investment firms" that things will get better, they usually don't. It's too bad, I really liked going there and preferred them to almost all of the other local theaters near me.

GO-KARRT on March 3rd, 2021 at 14:31 UTC »

Hope they don't change much. The Alamo by me is absolutely great and has been doing free open air, socially distanced showings in the courtyard right in front of them since last June or July.

edit: A few people messaged me about how they set up the outdoor screenings. Here's a Google street view of the area. They have an inflatable screen and shuffle things around. They really only do it once a week and it's always older movies.

maaseru on March 3rd, 2021 at 14:25 UTC »

Anyone know which Alamo locations will close? I would imagine maybe those that have remained closed during the pandemic which sucks since the Mueller Alamo is one, but is also one of the newer ones.