Helios and Matheson Analytics, owner of the shuttered Movie Pass theatrical ticket subscription service, among other businesses, has filed for Chapter 7 bankruptcy protection.
Under a Chapter 7 bankruptcy filing, the debtor’s assets are sold off to pay the lenders (creditors) whereas in Chapter 11, the debtor negotiates with creditors to alter the terms of the loan without having to liquidate assets.
Per a regulatory filing, New York-based HMNY said that after “considering” strategic alternatives, the company and its subsidiaries MoviePass and Zone Technologies, each filed a voluntary petition for relief under the provisions of Chapter 7 of Title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of New York on Jan. 28, 2020.
HMNY said its remaining board members — Prathap Singh, Gavriel Ralbag, Muralikrishna Gadiyaram and Joseph Fried — had tendered their resignations, leaving the former high-flying entertainment disruptor without a board.
In addition, Parthasarathy Krishnan, interim CEO, and interim CFO Robert Damon resigned their positions.
The bankruptcy court will assign a trustee to HMNY to determine distribution of the company’s assets, including MoviePass Ventures, a subsidiary founded to co-acquire films with film distributors.
Titles included American Animals, John Travolta’s Gotti and The Row with Lionsgate. The company also co-produced a series of low-budget direct-to-videos with Bruce Willis, including 10 Minutes Gone.
HMNY acquired upstart MoviePass in 2016, and together with former Netflix/Redbox executive Mitch Lowe, set about upending the theatrical business with a $10 monthly, daily access to any exhibitor’s screening.
The venture proved a hit with consumers as more than 3 million joined MoviePass, but a fiscal failure as the platform was on the hook paying theaters face value for every ticket used by subscribers.
The service lost hundreds of millions of dollars, and despite venturing into movie productions, distribution and a reverse stock transaction, could not elevate HMNY’s stock value above a penny.
MoviePass shut down four months ago with both Lowe and HMNY boss Ted Farnsworth exiting the company.