ICSM Business News: cinema woes as Cineworld looks set for Chapter 11 protection in America to stave off £4 billion pound debt mountain despite blockbusters like Top Gun Maverick bringing back audiences

It is being widely reported that USA based Cineworld is facing up to solving its £4 billion debt problem by entering Chapter 11. Under the system its cinemas will remain open and its staff paid as normal while the company seeks to put together a survival plan. In the mean time Cineworld is protected from its creditors and any legal action although the rescue plan has to satisfy not only the creditors but a judge as well.

However at the moment it is only considering Chapter 11 as an option although having announced it the second largest cinema chain in the world is very unlikely to continue much longer without legal protection.

It comes against a background of falling ticket sales which have not matched pre-Covid levels. The lockdowns severely hampered business and despite block busters like Top Gun Maverick and Elvis bringing back the crowds.

In a statement the company said: “Cineworld would expect to maintain its operations in the ordinary course until and following any filing and ultimately to continue its business over the longer term with no significant impact upon its employees.”

The Guardian’s business desk reported this week: “It emerged last week that Cineworld, which operates 751 sites in 10 countries, had hired lawyers from Kirkland & Ellis, and consultants from the restructuring experts AlixPartners, to advise on how to manage its soaring debts.”

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