The spread of the Coronavirus has forced the worldwide economy into a rather bizarre state. Many people are struggling to stay at home under quarantine in an effort to stop the spread of the virus, and as a result non essential public places have been closed. Therefore, movie theaters have become a pretty major victim due to this – they’ve lost both customers then as well as their employees. And as it turns out, there might be some pretty big side effects of being closed down for so long. In particular, it looks like AMC Theatres could be filing for bankruptcy soon.
Obviously people are trying to be optimistic regarding the Coronavirus pandemic. Many have been hoping that the quarantine issues might go back closer to normal by June, but that still hasn’t exactly been a guaranteed thing. In fact, many film distributors have been moving their film releases further through the year and even into the next. So as things continue to move around, it’s no doubt going to be harder for movie theaters and those who run them during the pandemic.
As revealed by THR, MKM Partners analyst Eric Handler believes AMC Theatres will indeed be filing for bankruptcy. Here’s what he stated:
“Based on our view that theaters will be closed until at least August and our belief that AMC lacks the liquidity to stay afloat until that time, we expect the company will soon be faced with filing for bankruptcy. Further fueling our liquidity concerns is AMC’s decision to stop paying rents to landlords effective April.”
What’s more, MarketWatch has also had a source say that AMC Theatres are working with Weil Gotshal & Manges in an effort to handle their Chapter 11 bankruptcy. It appears they’ll be working with lead lawyer Ray Schrock. And although the Chapter 11 bankruptcy is intended to save the company, at least for a little while, Shrock isn’t exactly someone you hire unless you’re dealing with something big. As stated:
“You don’t hire Ray unless you are filing,” a source said. “You are not going to hire them at their hourly rate to have a beer with them.”
It’s definitely going to be a difficult and unclear time period going forward through this Coronavirus pandemic. Nevertheless, we can still hope that AMC Theatres and anyone else effected by this pandemic will be able to bounce back when this all clears up.