AMC Theatres Could Be Filing for Bankruptcy By the End of 2020

AMC Theatres Could Be Filing for Bankruptcy By the End of 2020. Earlier this year we reported that an analyst was concerned AMC Theatres would be forced to file for bankruptcy due to the predicted losses caused by the COVID-19 pandemic. It seems that day is soon to come as AMC Theatres is preparing to file by the end of the year or early in 2021 at the latest. In a filing with the SEC about the threat of bankruptcy being a major concern for the largest movie theater chain by the end of the year AMC Theatres shared:

“We will require significant amounts of additional liquidity and there is substantial doubt about our ability to continue as a going concern for a reasonable period of time; holders of our Class A common stock could suffer a total loss of their investment.”

AMC Theatres had previously stated, “Given the reduced movie slate for the fourth quarter, in the absence of significant increases in attendance from current levels or incremental sources of liquidity, at the existing cash burn rate, the Company anticipates that existing cash resources would be largely depleted by the end of 2020 or early 2021. Thereafter, to meet its obligations as they become due, the Company will require additional sources of liquidity or increases in attendance levels. The required amounts of additional liquidity are expected to be material.” Adding, “There can be no assurance that the assumptions used to estimate our liquidity requirements and future cash burn will be correct, or that we will be able to achieve more normalized levels of attendance described above, which are materially higher than our current attendance levels, and our ability to be predictive is uncertain due to the unknown magnitude and duration of the COVID-19 pandemic.”

The National Association of Theater Owners (NATO) warned the US Congress in a hearing on Tuesday October 20th that, “Without such help, 70% of the theaters in the country could file for bankruptcy or close permanently by the end of the year. More than 70,000 jobs could be lost permanently,” the group’s statement read. “While many small business theater operators were able to access Paycheck Protection Program loans, given the duration of the pandemic, those funds have been exhausted and theater revenues are still close to nothing. The current rules of the program remain challenging for theaters that are shuttered or doing little business.”

Be sure to check back here at Chip and Co. for updates and all things Entertainment!

Featured Photo Credit: AMC Theatres

Source: ComicBook

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