Regal Cinemas, the nation’s largest exhibition chain, filed for Chapter 11 bankruptcy reorganization Friday with a prepackaged plan that would put financier Philip Anschutz in control of the circuit.
Earlier this year Anschutz and a team of other investors, including Los Angeles-based Oaktree Capital Management, bought up more than 80% of Regal’s bank debt and 90% of its bonds at deep discounts. The Anschutz-led team will acquire virtually all equity in the company under the reorganization plan in exchange for a portion of their debt holdings.
The bankruptcy filing shows Regal, which operates 3,831 screens at 328 theaters, has debts of $2.3 billion and assets of $1.9 billion.
The privately held company asked for a Dec. 7 court hearing to confirm its reorganization plan.
Under the plan, unsecured creditors owed $5,000 or less would be paid in full with interest, while those with claims over $5,000 would receive a pro rata payment from a $75 million pool. It was not immediately clear how much of the targeted debt would be covered by the pool. Bondholders can expect about 20¢ on the dollar.
Current owners lose out
Big losers in the reorganization are current Regal owners Hicks Muse Tate & Furst and Kohlberg Kravis Roberts & Co., investment firms who put up $1.5 billion in 1998 to buy the theater chain. Their investment will be lost under the proposal.
Once the Regal reorganization is in place, Anschutz will control more than 6,000 screens in the U.S., including those of United Artists Theaters and Edwards Theaters.