The company that operates Redstone 8 Cinemas and Holiday Village 4 Cinemas didn’t file for bankruptcy; that company’s parent company did.
“So it's like the grandfather, not the parent, of these theaters has filed bankruptcy,” Parsons Behle & Latimer bankruptcy attorney Tom Beckett told KPCW’s Mountain Money.
The upshot of what Beckett’s saying is there’s no “immediate threat” that Redstone or Holiday Village’s leases will be terminated.
He said one of two things will happen, now that Metropolitan Theatres Corporation—the “grandfather” company—has filed for Chapter 11 bankruptcy.
Its creditors will either renegotiate and accept lower debt payments, or the creditors will dissolve Metropolitan Theatres by selling it or acquiring its property. That would mean acquiring Metropolitan/Rocky Mountain Cinemas, LLC, the subsidiary that owns Redstone and Holiday Village.
The Chapter 11 bankruptcy proceedings. will temporarily suspend Metropolitan Theatres’ debts to allow for those negotiations. So Metropolitan Theatres can attempt to convince creditors they can get better returns without taking over the company.
“It's got to persuade them that reorganization is better than liquidation,” Beckett said. “Otherwise, the creditors say, ‘You know, let's get this over with it, pull off the Band-Aid. Let's just liquidate it.’ And that happens quite a lot.”
Metropolitan Theatres Corporation has not indicated it wants to end any leases held by its subsidiary Rocky Mountain Cinemas yet.
But if the creditors liquidate Metropolitan, Rocky Mountain’s new owner could decide to end those leases, which include Redstone and Holiday Village. But the theaters aren’t facing that possibility yet.
