Pacific Theatres, which includes ArcLight Cinemas, announced Friday that it will liquidate its assets under Chapter 7 of the bankruptcy code, ending the company’s 75-year run in the exhibition business.
But the bankruptcy filing also held a strong hint that one piece of the Forman family’s theater empire will live on. The Decurion Corporation — the parent company of Pacific Theatres — arranged a deal last November in which it kept the right to use the ArcLight and Pacific brand names at the ArcLight Hollywood and the Cinerama Dome — a strong indication that Decurion intends to reopen the location.
Now led by third-generation CEO Chris Forman, the Decurion Corporation still owns the ArcLight Hollywood and the Dome. Decurion is not part of the bankruptcy filing, and the Forman family’s substantial real estate holdings are likely to be untouched by the Pacific Theatres bankruptcy.
Pacific Theatres announced in April that it would not reopen, after its 17 locations had been closed for more than a year due to the pandemic. Decurion owns the property at just two of the locations — Hollywood and Chatsworth.
Most of the remaining 15 locations are likely to be leased out to new operators in the near future. Variety reported earlier this week that AMC is close to finalizing a deal for the theaters at the Grove and the Americana at Brand shopping malls.
According to the bankruptcy filings, the six entities that filed for bankruptcy on Friday had $69 million in liabilities, and just $4.8 million in total assets. The only secured debt is a $6.4 million obligation 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 unsecured creditors also include all the major film studios, along with many smaller distributors, who were still owed box office revenue when Pacific’s theaters closed last year. Disney is owed $1.26 million, followed by Warner Bros. ($779,000), Universal ($619,000), Paramount ($501,000), Sony ($389,000) and indie distributor Neon ($231,000). In sum, 25 distributors are owed $4.26 million.
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.
The most notable disclosure relates to the November transaction between Pacific and parent company Decurion. According to the filing, Decurion paid Pacific Theatres $10.5 million to terminate its lease on the property. Pacific turned around and gave most of the money to Bank of America to pay down debt. As part of the transaction, Pacific and ArcLight Cinemas gave Decurion “certain intellectual property licenses,” and agreed not to operate under the Pacific and ArcLight brand names in the Hollywood area.
In other words, if some other operator were to take control of Pacific and ArcLight with an eye toward reviving the brands, that company would be barred from opening a theater under those names in Hollywood — because doing so would compete with Decurion. Variety reported on Tuesday that industry sources said they expected Chris Forman to restore and reopen the Hollywood location.
Decurion’s spokesperson declined to comment on the November transaction.
“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,” the company said in a statement on Friday. “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.”
Over 25,000 signatories on a Change.org campaign to “save” the Cinerama Dome.