The likelihood of a bankruptcy reorganization doesn’t mean that AMC’s 634 locations in the U.S. and Canada — and more than 1,000 venues worldwide — will be closing their doors for good. In fact, there are real questions about whether or not AMC can, in effect, afford to go bankrupt in this climate.
For any company, bankruptcy is always the last option. But that’s particularly true in the time of COVID-19, said Robert Marticello, a partner at the law firm Smiley Wang-Ekvall. “What they’re going to end up doing to landlords is saying, ‘Cut us a break. We’re not going to pay rent [while we’re closed], but when we come back, we will pay what we owe you,'” Wedbush Securities analyst Michael Pachter predicted. He thinks AMC will tell property owners, “‘You have to work with us, or we will declare bankruptcy and then you’ll get nothing from us.'”
Still, there are other issues. When most companies enter bankruptcy, they line up debtor-in-possession financing to serve as a bridge loan, allowing them to continue operating until their debts can be rejiggered and a plan can be hammered out for the company to either re-emerge or sell itself. Those loans could be hard to come by given the uncertainty surrounding theater closures.
“I don’t think there’s a buyer,” Pachter said. “Realistically, if they sell themselves, it would be to their creditors. The market is telling you it’s not worth very much.”
They'll be fine post-bankruptcy.
who is making these companies continue to pay rent we need to throw real estate developers and owners under the bus
Of course not. Just means they will lay off half their staff, leave their debt for middle class to pay with higher taxes while AMCTheatres benefit from tax breaks and stimulus packages and their CEO my guess is still getting a multi- million$$ bonus. Talk about double dipping?
Why should I go to a movie theater when I have a 70 inch HDTV, surround sound stereo, all the cheap popcorn candy and drinks I need only to deal with high ticket prices, high concessions, and a ghetto diva behind me who constantly has to talk on the cell phone during the movie?
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