Coronavirus Pandemic May Force AMC Theaters to File Bankruptcy
Life is changing rapidly for people and businesses across the country as the spread of coronavirus has forced government officials to issue stay-at-home orders. Gatherings of 10 or more are banned almost everywhere, causing businesses that naturally create gatherings- such as movie theaters- to close. AMC theaters nationwide, including all of the AMC theaters in Mesa and throughout Arizona are at the mercy COVID-19. This is possibly making AMC Theaters to file bankruptcy.
AMC has 634 locations in the US and Canada and more than 1,000 worldwide. There are currently 12 AMC theaters in Arizona. Like many businesses, AMC was forced to close March 16, 2020. More than 600 of AMC’s corporate employees, including the CEO, have been furloughed. It is estimated that AMC is currently running at a $155 million loss per month. The company likely only has enough liquidity to last until June or July. AMC already had $4.9 billion in debt before Coronavirus pandemic started.
Massive debts that will continue to grow combined with AMC’s decision to stop paying its landlords starting in April mean that the closure of your Local AMC Theater (AMC Mesa Grand) may be permanent. Since many Americans are experiencing reduced income, even when movie theaters can reopen, they won’t have the budget for discretionary entertainment purchases such as movie tickets. Those who do have money to go to the movies when the pandemic has passed will probably spend their money elsewhere since they’ve spent the last few months indoors watching movies.
AMC Theaters is not Alone with Financial Woes
AMC Theaters is not the only entertainment company facing financial woes due to the coronavirus pandemic. Disneyland and Broadway are shut down, along with Arizona’s busiest movie theater chain, Harkins Theaters. Actually, every movie theater in Arizona is closed for showing films. A few of the “Dine In Theaters” in Arizona are still serving food to go, with mixed success.
Additionally, the first name in acrobatic entertainment, Cirque du Soleil, is also on the brink of bankruptcy. Major studios are delaying the release of big-budget films, like Pixar’s Soul and Disney’s Mulan. Sony has delayed the release of all of its summer films until late 2020/early 2021. This means the movie production industry will be slowing down. If you know anyone who works on movies, you know these are the type of people who insist on seeing every movie in theaters and refuse to sneak in snacks.
During the recession of 2008, the U.S. saw a 33% increase in bankruptcy filings. It is reasonable to expect a similar increase in bankruptcy filings due to the spread of coronavirus. Businesses aren’t immune to this, and those that don’t receive forms of government bailout will be particularly susceptible. Only time will tell which businesses will survive the pandemic, but bankruptcy isn’t a death sentence. Kodak, Jack in the Box, and Best Buy are examples of businesses who successfully recovered after a bankruptcy.
If you are like AMC Theaters and are feeling the impact of COVID-19 on your financial life, give our Mesa Bankruptcy Lawyers a call. We offer Free Consultations, Bankruptcy by Phone (Coronavirus Safe), Zero Down Arizona Bankruptcy, File Now,.. Pay Later Bankruptcy, and experienced attorneys and staff to help you with your debt relief needs.