Regal Cinemas Owner Confirms Chapter 11 Bankruptcy Filing may be Imminent
Cineworld Group PLC, one of the world's largest movie theater chains, confirmed that it is considering filing for Chapter 11 bankruptcy protection in the U.S. and similar actions elsewhere. The company has hired Kirkland & Ellis as restructuring counsel. Cineworld, which owns Regal Cinemas in the United States and operates in 10 countries, is considering Chapter 11 to help preserve a business that has struggled to rebound from the impact of COVID-19 restrictions.
Regal Cinemas last filed for Chapter 11 bankruptcy protection in 2001 in the U.S. Bankruptcy Court for the Middle District of Tennessee in Nashville, listing $1.92 billion of assets and $2.29 billion of debts. U.S. Bankruptcy Judge Marian Harrison presided over the 2001 case. Cineworld has not yet indicated whether it will again file in the Middle District of Tennessee. With Judge Harrison still on the bench, some observers believe that a second filing in Nashville would be a friendly and familiar forum. Paul Jennings of Bass, Berry & Sims, PLC represented Regal Cinemas in the 2001 case.
Regal Cinemas issued a press release in early 2002 announcing that it emerged from its voluntary prepackaged Chapter 11 proceeding:
Regal Cinemas' plan of reorganization, which was accepted by holders of more than 95 percent of the Company's creditors that voted on the plan, was confirmed by the U.S. Bankruptcy Court for the Middle District of Tennessee in Nashville on December 7, 2001, clearing the way for today's emergence.
To complete its restructuring initiatives, Regal filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code along with a prepackaged plan of reorganization on October 12, 2001, following a solicitation of votes of its subordinated debt holders and other general
unsecured creditors on a restructuring of the Company's debt. "The consensual plan of reorganization that became effective today creates a significantly deleveraged Regal Cinemas with sufficient cash to fund its operations and a sound financial structure," said Regal Chairman and Chief Executive Officer Michael L. Campbell. "The successful completion of the Company's reorganization provides the maximum recovery to our creditors, and at the same time will enable Regal to maintain its position as the largest theatre circuit in the nation."
Mr. Campbell noted the important role its employees, vendors and the studios played in the completion of Regal's restructuring initiatives. "The hard work of our employees and the support of the studios, along with that of our vendors, made it possible for our theatres to continue to operate without interruption during the brief course of the case."
Under the terms of the plan, certain senior bank debt holders will receive payment of accrued and unpaid interest and 100 percent of reorganized Regal's common stock, subject to dilution by a new management incentive plan. Certain of these investors will also receive payment of certain costs and expenses incurred as a result of the restructuring of Regal. Other holders of allowed claims arising under Regal's senior credit facility will be paid in full with interest.
All holders of the Company's Subordinated Notes will receive their pro rata share of cash in the aggregate amount of $181,031,250. General unsecured creditors will receive payments of cash equal to 100 percent of their allowed claim.