Regal Cinemas’ Parent Announces Agreement With Lenders to Emerge From Chapter 11 Bankruptcy, Wall Street Not Impressed

Cineworld, the bankrupt British-based corporate parent to Regal Cinemas, April 3 announced it has entered into a restructuring agreement with lenders controlling about 83% of the company’s fiscal loans due in2025 and 2026 and revolving credit facility due this year.

The agreement, if accepted by a judge, would reduce the exhibitor’s debt by $4.53 billion, raise $800 million through a backstopped equity offering, and provide $1.46 billion in new debt financing.

In light of the level of existing debt that is expected to be forgiven under the restructuring plan, Cineworld said the new agreement with lenders does not provide for any recovery for the company’s shareholders. The received $1.94 billion debtor-in-possession fiscal support from lenders to maintain operations after filing Chapter 11 bankruptcy last September.

Cineworld is the No. 2 theatrical distributor, operating in 10 countries, including the U.S. and the U.K. with 747 sites and 9,139 screens globally.

“This agreement with our lenders represents a ‘vote-of-confidence’ in our business and significantly advances Cineworld towards achieving its long-term strategy in a changing entertainment environment,” CEO Mooky Greidinger said in a statement. “With a growing slate of movie blockbusters and moviegoers returning to cinemas in increasing numbers, Cineworld is poised to continue offering the most immersive cinema experiences.”

While Greidinger may think Cineworld received a vote of confidence, Wall Street has other ideas. The company’s stock opened April 3 down almost 32%.

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Regal Cinemas Corporate Owner Confirms It Is Considering Bankruptcy

In response to media speculation, Cineworld, owner of No. 2 U.S. theatrical operator Regal Cinemas, Aug. 22 said it is evaluating strategic options to both obtain additional liquidity and potentially restructure its balance sheet through a “comprehensive deleveraging transaction” that includes a possible voluntary Chapter 11 filing in the U.S. and associated ancillary proceedings in other jurisdictions as part of an orderly implementation process.

In the meantime, U.K.-based Cineworld and Regal theaters globally remain open for business as usual. Cineworld, which acquired Knoxville, Tenn.-based Regal in 2018 for $3.6 billion, operated 7,200 screens across 549 theaters, employing more than 26,000 people prior to the pandemic. The COVID-19 health emergency forced the chain, along with the theatrical market, to shutter all theaters. Regal has struggled to regain its fiscal footing ever since. 

Cineworld said it is in discussions with many of its major stakeholders, including its secured lenders and their legal and financial advisers about a fiscal re-organization filing that would allow it access near-term liquidity and support the orderly implementation of a fully funded deleveraging transaction. Cineworld would expect to maintain its operations in the ordinary course until and following any filing and ultimately to continue its business over the longer term with no significant impact upon its employees.

As previously announced, any deleveraging transaction would, however, result in very significant dilution of existing equity interests in Cineworld. The company said any further announcements would be made if and when appropriate.

Wall Street isn’t waiting. Shares of Cineworld and rival AMC Theatres, the world’s No. 1 theatrical distributor, plummeted in early Aug. 22 trading. Cineworld’s stock is down 23% and AMC shares down more than 30%.

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WSJ: Regal Cinemas Parent Cineworld to File for Bankruptcy

Cineworld, the U.K.-based parent of No. 2 theatrical operator Regal Cinemas, is reportedly looking to file for bankruptcy as it struggles to emerge from the post-pandemic shutdown and ongoing industry challenges.

The Wall Street Journal, which first reported the move citing sources, said the chain has retained attorneys and consultants familiar with the bankruptcy process, and that the filings are expected soon in the U.S. and the U.K.

Cineworld, which acquired Regal in 2018 for $3.6 billion, earlier this week reported underwhelming financial results, including lower-than-expected ticket sales.

“Despite a gradual recovery of demand since re-opening in April 2021, recent admission levels have been below expectations,” Cineworld said in an Aug. 18 statement.

The chain said that reduced ticket sales projections going forward are due to a limited film release slate that is anticipated to continue through November.

“[This is] expected to negatively impact trading and the group’s liquidity position in the near term,” the company said.

Knoxville, Tenn.-based Regal operated 7,200 screens across 549 theaters, employing more than 26,000 people through 2019. Unlike rival AMC Theatres, which managed to secure more than $3.3 billion in post-pandemic funding, Regal almost filed for bankruptcy during the height of the Covid-19 theater closures in 2020 after shuttering all screens.

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TiVo Wins MobiTV Bankruptcy Asset Auction, Beating Roku, Others

TiVo has edged out a competing bid from Roku and others for the intellectual assets of bankrupt MobiTV, a distributor of software for on-demand programming, live TV, catch-up TV, network DVR and content recommendations without the need of a set-top box.

TiVo’s winning bid of $18.5 million, which includes $17.4 million in cash, beat a collective $18 million offer from Roku, patent licensor RPX and Amino Technologies. TiVo’s initial bid during the two-day process had been $13 million.

MobiTV, based in Emeryville, Calif., filed for Chapter 11 bankruptcy protection on March 1, citing $10 million to $50 million in assets and $50 million to $100 million in liabilities.

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“The acquisition of the MobiTV assets immediately expands our capabilities and the addressable market for our IPTV solutions, helping to secure TiVo’s position as a leading provider of pay-TV solutions,” Jon Kirchner, CEO of Xperi, said in a statement. “As a result, the acquisition of MobiTV’s managed service assets will help accelerate our growth in the IPTV market through an increased subscriber footprint.”

MobiTV delivers a full TV platform, including live and on-demand content, network recording functionality and transport rights. The platform could provide an attractive extension of TiVo’s IPTV pay-TV service offerings by adding managed services with the ability to reduce deployment time and onboarding costs. MobiTV will help increase TiVo’s IPTV penetration with pay-TV operators enabling them to rapidly launch a branded, fully featured, app-based TV service. The acquisition includes MobiTV’s patent portfolio, which is highly complementary to Xperi’s existing media patent portfolio.

The closing of the transaction is subject to various conditions, including approval by the bankruptcy court. Subject to bankruptcy court approval and pending closing, Xperi expects MobiTV’s operations to continue in the ordinary course. The acquisition is expected to close by early June 2021 and to be accretive beginning in 2022.

Roku Joins TiVo, Others in Bid for Bankrupt MobiTV Assets

Subscription streaming video pioneer Roku May 11 submitted a $5 million bid for the intellectual assets of bankrupt MobiTV, the Emeryville, Calif.-based company providing software for on-demand programming, live TV, catch-up TV, network DVR and content recommendations without the need of a set-top box.

On March 1, MobiTV filed for Chapter 11 bankruptcy protection, citing $10 million to $50 million in assets and $50 million to $100 million in liabilities.

Roku, which co-started the SVOD market more than 10 years ago with Netflix, joined RPX, a patent license aggregator, in the bid. U.K.-based IPTV software provider Amino joined the companies, contributing another $10 million bid for the “going concern” of the MobiTV business.

That consortium was then edged to the sidelines when TiVo Xperi upped its original $13 million bid to $15.5 million, and is now seen as the frontrunner for MobiTV assets — in an auction process that continues today.


Alamo Drafthouse Movie Theater Chain Files for Chapter 11 Bankruptcy Protection

Alamo Drafthouse, a chain of indie movie theaters based in Austin, Texas, has reportedly filed for Chapter 11 bankruptcy — a victim of the ongoing pandemic that has decimated the movie theater business. The chain’s three Arizona screens filed for bankruptcy last May.

Alamo, which operates 40 theaters across the country, will remain operational as the filing attempts to restructure the company’s finances and operational control. Founder Tim League is fronting a new financial group and will become executive chairman, while Shelli Taylor becomes CEO. Taylor previously was CEO of Austin-based United PF Partners, a conglomerate of Planet Fitness franchisees.

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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,” Taylor said in a statement. “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.”

League said the increase in vaccination availability, slate of new movie releases, and pent-up consumer demand portend a strong rebound for the exhibition business.

“We’re extremely confident that by the end of 2021, the cinema industry — and our theaters specifically — will be thriving,” he said. “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.”

Moviefone Sold in MoviePass Bankruptcy Proceedings

Moviefone, the iconic voice of the now-discontinued telephone service marketing theatrical releases and ticket sales, has been sold for $1 million in bankruptcy proceedings involving Helios and Matheson Analytics, which also owned the defunct MoviePass subscription ticket service.

Founded in 1989, Moviefone offered callers movie, ticket and screening information nationwide. The service was acquired for $388 million in 1999 by AOL, which in 2017 merged with Yahoo to become Oath. Helios and Matheson bought the brand in 2018 for $8 million from Oath in a largely stock-based transaction. (Oath in 2019 was renamed Verizon Media.)

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In the Internet era, Moviefone morphed into an online service through an agreement in 2001 with The service in 2012 partnered with Fandango, which is owned by NBCUniversal.

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Bankrupt Sears Still Selling Movie Discs Online

Sears and subsidiary Kmart stores, and its online and mobile platforms, remain open following the Oct. 15 Chapter 11 bankruptcy filing and continue to offer a full range of products — including DVD and Blu-ray Disc movies.

The fiscal reorganization by Sears Holdings Corp. underscores ongoing fiscal challenges traditional brick-and-mortar retail faces in the age of ecommerce.

Hoffman Estates, Ill.-based Sears announced a series of actions it says will establish a sustainable capital structure, continue streamlining its operating model and return the company to profitability – last achieved in 2010.

Sears will close 142 unprofitable stores near the end of the year. Liquidation sales at these stores are expected to begin shortly. The company previously announced closure of 46 unprofitable stores that is expected to be completed by November.

The company — best known for its Kenmore appliances and Craftsman tools — announced it received commitments for $300 million in debtor-in-possession financing and is negotiating for another $300 million in financing.

“Our goal is to achieve a comprehensive restructuring as efficiently as possible, working closely with our creditors and other debtholders, and be better positioned to execute on our strategy and key priorities,” outgoing CEO Edward Lampert said in a statement.

Regardless, Sears will continue to sell new-release movies on its website. The site currently offers 141 Blu-ray titles, in addition to 4K Blu-ray, and more than 500 DVD movies. Orders are facilitated by Kmart and other third-party distributors.

Indeed, Sears found itself in hot water in 2011 when it was accused of selling pornographic DVDs on its website. The retailer attributed the error to third-party merchants slipping content through its product monitoring system.