Pacific Theatres Files for Chapter 7 Bankruptcy
Pacific Theatres Exhibition Corporation, which includes ArcLight Cinemas, announced they are filing for bankruptcy under Chapter 7 in order to liquidate their assets for the benefit of creditors.
According to court filings, the six entities that filed for bankruptcy on Friday had $85.3 million in liabilities, and just $4.8 million in total assets. The only secured debt is a $6.4 million debt to Bank of America, which means that all the unsecured creditors — including landlords, taxing authorities, former employees, vendors, various litigants, and gift card holders — will likely wind up with little or nothing. The six bankrupt entities did not declare any real property as assets.
Pacific’s parent company, the Decurion Corporation, separately owns hundreds of millions of dollars worth of commercial real estate through Robertson Properties Group. The parent company will also continue to own the ArcLight Hollywood and the Cinerama Dome, and the Pacific Theatres location in Chatsworth, both of which are held through other entities. Industry sources have said they expect that Decurion will eventually reopen the Hollywood location and the Dome.
The bankruptcy filing includes some clues suggesting that is in fact the case. Last November, Pacific Theatres received $10.5 million from Dome Landlord (the Decurion entity that controls the Dome) to terminate its lease on the property. As part of that transaction, Pacific and ArcLight Cinemas gave the landlord “certain intellectual property licenses,” and agreed not to operate under the Pacific and ArcLight brand names in the Hollywood area. In other words, Decurion not only still owns the Dome — it also still owns the right to run a theater there under the ArcLight or Pacific brand names. (Pacific used the $10.5 million almost entirely to pay down secured debt to Bank of America.)
Among the assets declared by the debtors were the furniture and projectors in the theaters, though most are no longer in the company’s control, and the ArcLight websites and customer lists. The company disclosed that it brought in $175.2 million in revenue in 2019, which cratered to $25.7 million in 2020 due to the pandemic.
“After a year of the pandemic’s devastating effect, Pacific Theatres Exhibition Corporation announced in April that it would not reopen its ArcLight Cinemas and Pacific Theatres locations,” Pacific Theatres said in a statement. “Having taken steps to wind down the business, the company today is seeking protection under Chapter 7 of the Bankruptcy Code in order to liquidate its remaining assets for the benefit of its creditors.”
The statement continues, “We are deeply grateful to our employees, our guests, and the film community for coming together over the past decades to create so many wonderful moviegoing experiences. We are overwhelmed by the extraordinary outpouring of memories. Thank you for sharing these with us. We will miss you all.”
On Tuesday, Variety reported that AMC is close to taking over the Pacific Theatres locations at The Grove in the Fairfax neighborhood and The Americana at Brand in Glendale. Ticketing websites showed two new theater locations in the city — “AMC The Americana 18” and “AMC The Grove 14” — but those locations were later erased from the AMC app and website. by ethan shanfeld
Many are hopeful that the Hollywood ArcLight and Cinerama Dome will eventually reopen, with over 25,000 signatories on a Change.org campaign to “save” the historic theater.
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