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Alamo Drafthouse Cinemas Holdings, LLC – Dine-In, Austin-Based Cinema Group Files Chapter 11 in Last Stand to Fend Off COVID-Driven Collapse; 40% Owned by Altamont Capital, Debtors Will Look to 363 Sale Process; DIP to be Agented by Fortress

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[Just filed. Developing Story.] March 3, 2021 – Alamo Drafthouse Cinemas Holdings, LLC and 33 affiliated Debtors (“Alamo Drafthouse” or the “Debtors”) filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 21-10474. The Debtors, an Austin, Texas-based "dine-in" cinema chain with 41 locations across the United States, are represented by Matthew B. Lunn of Young Conaway Stargatt & Taylor LLP. Further board-authorized engagements include (i) Portage Point Partners as financial advisors, (ii) Houlihan Lokey Capital, Inc. as investment banker and (iii) Epiq Corporate Restructuring, LLC as claims agent. 

At filing, the Debtors noted between 1,000 and 5,000 creditors; estimated assets between $100.0mn and $500.0mn; and estimated liabilities between $100.0mn and $500.0mn. Documents filed with the Court list the Debtors’ three largest unsecured creditors as (i) Summit Glory Property LLC ($2.2mn rent claim), (ii) 30 West Pershing, LLV ($2.0mn rent claim) and (iii) Albee Development LLC ($1.5mn rent claim), 18 of the Debtors' top 30 unsecured creditors are landlords with each of their claims in excess of $170k.

In December 2020, the COVID-stricken, dine-in theater chain hired Houlihan Lokey in an effort to secure financing to see it through the pandemic. The Debtors reportedly have a Libor+3% $70.0mn first lien term loan due June 2023.

Altamont Capital holds a 40% interest in the Debtors acquired in June 2018.

Goal of the Chapter 11 Filings

In Court filings, the Debtors note that on February 16th they had entered into restructuring support agreement in support of either (i) an in-court section 363 sale process or (ii) an out-of-court restructuring (in either case a "Strategic Transaction") with League Holdings, LLC, Thunderbird Brothers LLC, ACP Alamo Finance, Inc., CF ALMO UST LLC, and CF ALMO UB LLC (collectively, the "RSA Parties"). The choice of a sale process has now seem to have been made.

DIP Financing

The Debtors have apparently lined up debtor-in-possession ("DIP") financing to be provided by the RSA Parties, but with an interesting twist; Fortress Credit Corp. ("Fortress") is to serve as administrative agent.  Fortress affiliates are amongst the parties to the RSA, it should be clear shortly where they sit within the Debtors' prepetition capital structure and when they acquired that debt.

Significant Shareholders (of Alamo Drafthouse Cinemas Holdings, LLC)

  • Altamont Capital Management: 40.0%
  • Catalina Brothers, Ltd.: 31.3%
  • Major Kong Industries, Ltd.: 27%

About the Debtors

According to the Debtors: “'The Alamo Drafthouse Theater is good food, good beer and good film, all at the same place!'

That’s how we described ourselves in 1997, and that mission hasn’t changed and will never, ever change. For over two decades we’ve worked to make the Alamo Drafthouse experience the best cinematic experience in the world."

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The post Alamo Drafthouse Cinemas Holdings, LLC – Dine-In, Austin-Based Cinema Group Files Chapter 11 in Last Stand to Fend Off COVID-Driven Collapse; 40% Owned by Altamont Capital, Debtors Will Look to 363 Sale Process; DIP to be Agented by Fortress appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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