HOLLYWOOD — A bankruptcy court has extended the period that GC Cos. can offer benefits to 11 key execs, with the General Cinemas parent estimating a preliminary high bidder for the circuit will be named within two weeks.
In filings with U.S. Bankruptcy Court in Wilmington, Del., circulated Tuesday, GC said it needs to keep severance provisions in place a while longer so employees don’t bolt the company during the ongoing auction of General Cinemas. It’s estimated the severance extension could result in a $579,000 cost to the company, and some creditors grumbled in separate filings that the move was ill-advised.
In holding pattern
The auction for General Cinemas — a 677-screen nationwide circuit that has 17 Mexican and South American theaters — is under court supervision. Recently, suitors have shown signs of frustration with the months-long process, complaining that too little information has been provided about where the process was headed (Daily Variety, Oct. 11).
Bids placed so far are believed to include one from exhib AMC Entertainment that’s backed by New York investment firm Apollo Management; another by a partnership of Canadian conglom Onex and L.A. buyout firm Oaktree; and a joint offer from exhibs Century Theaters and Muvico. The Cinemark movie chain is interested only in GC’s international theaters.
It’s believed some bidders would retain more of General Cinemas management than others. That, and other details, eventually could be considered as well as the price of individual offers.
GC indicated the high bidder it soon will name will serve as a “stalking horse” to prompt further offers.
GC shares have been hammered down to penny-stock levels since the Chestnut Hill, Mass.-based company filed for Chapter 11 bankruptcy reorg in October 2000. On Tuesday, the stock was off 15¢ — another 50% — at 15¢ in late-session trading.
(Dow Jones contributed to this report.)