(Bloomberg) — Studio Movie Grill Holdings, the theater chain where film-goers can order Sriracha chicken sliders and a Cruzan mango mojito right in the middle of the latest blockbuster, filed for bankruptcy on Friday after the Covid-19 pandemic kept audiences away.
It’s another sign that the movie industry is caught in a downward spiral, with people staying home to avoid catching the disease, and studios holding back new films that might attract them. The biggest chain, AMC Entertainment Holdings Inc., has said it may run out of cash by the end of this year or early in 2021.
“We plan to use this filing to strengthen our business by reducing liabilities and reposition SMG to emerge a stronger organization built for the future as we recover from the unparalleled impact of Covid-19,” Chairman Brian Schultz said in a letter on the company’s website.
The outbreak forced SMG to temporarily close all its locations earlier this year. About a third of the company’s 33 theaters are still closed, according to its website; the rest are open for business as usual, it said.
Secured lenders to the Dallas-based company agreed to provide a new loan to support its restructuring, according to the letter. Studio Movie Grill has assets between $50 million and $100 million and liabilities between $100 million and $500 million, according to its Chapter 11 petition.
The case is Studio Movie Grill Holdings LLC, 20-32633-sgj11, U.S. Bankruptcy Court for the Northern District of Texas (Dallas).
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