AUSTIN (KXAN) — Alamo Drafthouse, the popular Austin-based restaurant theater chain, has filed for bankruptcy and announced a sale. The Chapter 11 bankruptcy filing will allow Alamo Drafthouse to raise the money it needs to continue operating amid the lengthy pandemic.
As part of this bankruptcy, Alamo Drafthouse will close down underperforming locations, including the Alamo Drafthouse Ritz location in downtown Austin on Sixth Street.
Two others closures were also announced — one in New Braunfels and one in Kansas City, Missouri. And the theater chain will halt development permanently on a theater location in Orlando. More closures could occur as Alamo Drafthouse evaluates the “health of all leases during the Chapter 11 process.”
The bankruptcy and sale will also allow Alamo Drafthouse to “restructure its lease obligations along with other contracts to give the business an opportunity to rebound in the uncertain future.”
Alamo Drafthouse has 41 theaters in 10 states, including six theaters in Austin. Only three of those theaters are currently open and each has a scaled-down number of movie options. Its newest location in Mueller has remained closed during the pandemic. So has the Ritz location, which is now permanently closed.
Founder Tim League will remain involved in the company. He is part of the lender group buying the assets.
Statement from CEO Shelli Taylor:
“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.
“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.”
Statement from founder Tim League
“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.
“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.”
Statement from Alamo Drafthouse
In a statement released Thursday, the company said, “Alamo Drafthouse isn’t going anywhere — promise.” They’re going to continue to show movies this weekend at each location.