Alamo Drafthouse files for Chapter 11 bankruptcy due to pandemic

Alamo Drafthouse has filed for Chapter 11 bankruptcy due to financial issues during the pandemic.

The Austin-based company says it plans to find a buyer during its Chapter 11 bankruptcy, which allows it to continue operating while its managers and advisers work on repaying creditors.

"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," the company said in a statement. "More importantly, it will position Alamo Drafthouse to return to growth and continue executing on its long-term strategic vision."

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In its bankruptcy petition, Alamo Drafthouse listed assets and liabilities of as much as $500 million each. Court papers show that private equity firm Altamont Capital Management owns 40% of the company. 

Alamo Drafthouse has more than 40 theaters nationwide and as part of the bankruptcy, the company says it will close down a few underperforming locations and restructure its lease obligations. Alamo closed its remaining theaters in North Texas in October 2020 and on March 3, 2021, it announced it was closing it's iconic The Ritz location in downtown Austin.

The Alamo Drafthouse at The Ritz opened in November 2007. It, like most of the rest of the Alamo Drafthouse theaters, closed in March 2020 due to the ongoing impact of COVID. 

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Associated Press contributed to this report.