Iconic movie theater chain files for Chapter 11 bankruptcy

The Covid-19 pandemic, which shuttered businesses around the world in 2020, had a major impact on restaurants, retailers and other operations in the U.S., forcing many companies to file for bankruptcy.

Among the major restaurant chains that filed because of the pandemic were pizza/arcade chain Chuck E. Cheese; the parent of Souplantation and Sweet Tomatoes, Garden Fresh Restaurants; and the parent of HomeTown Buffet and Old Country Buffet, Fresh Acquisitions.

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The social distancing and other Covid-19 safety requirements made it difficult for many of these types of concepts to continue operating during the pandemic and, in some cases, even after Covid safety measures were relaxed.

The Covid-19 pandemic also pushed several retail chains into bankruptcy, including Bed Bath & Beyond, JC Penney and movie theater operator CMX Cinemas, which filed in April 2020.

Regal Cinemas owner Cineworld struggled during the pandemic and afterward, closing over 50 Regal theaters and finally filing bankruptcy in September 2022. Cineworld, the second largest theater operator behind AMC, emerged from bankruptcy July 31, 2023. 

The movie theater industry has continued to struggle to get people back into their brick-and-mortar properties after the Covid-19 pandemic, and the smaller crowds since the pandemic began has led to more theater operators filing bankruptcy.

Metropolitan Theatres files for bankruptcy

Iconic movie theater chain Metropolitan Theatres Corp. has filed for Chapter 11 bankruptcy protection to reorganize its business affairs, which will include restructuring and possibly rejecting theater leases, company president David Corwin wrote in a bankruptcy declaration.

The Los Angeles-based movie theater chain on Feb. 29 filed its Subchapter V bankruptcy petition in the U.S. Bankruptcy Court for the Central District of California in Los Angeles listing about $26.5 million in assets and liabilities.  

The debtor said in court papers that the financial distress caused by the temporary closures of theaters during the Covid-19 pandemic in 2020 continued after theaters reopened as the in-person movie-viewing business remained slow in the ensuing years.

Longtime movie theater operator closed locations

The slowdown in theater business coupled with significant lease obligations and business expenses negatively impacted the company's financial stability. The company in 2022 shut down two poorly performing theaters in Aspen, Colo., and Hailey, Idaho, to reduce its losses.

Movie industry labor disputes from May 2 to Nov. 9, 2023, which led to strikes by the Writers Guild of America and Screen Actors Guild-American Federation of Television and Radio Artists, put further strain on the theater business, the debtor said in court papers.  The industry has forecasted impaired performance in 2024 and into 2025 from fewer film releases due to production delays. Domestic box office sales are expected to drop 11% in 2024 from 2023 levels due to fewer film releases.

Metropolitan Theatres was founded in Los Angeles in 1923 during the silent film era with one theater, the Broadway. The company grew over the next two two decades to become the dominant downtown Los Angeles movie theater operator by the late 1940's, court papers said. The company currently operates 16 theaters and 87 screens, including two IMAX auditoriums in California, Colorado and Utah.

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