×

iPic Entertainment Files for Chapter 11, Will Pursue Sale (EXCLUSIVE)

iPic Entertainment, the luxury theater chain that helped popularize the concept of dine-in moviegoing, has filed for Chapter 11 bankruptcy. It hopes to restructure its debt and has engaged investment banker PJ Solomon to pursue a possible sale.

Last month, the company warned investors that it might be file for bankruptcy after it missed a $10.1 million interest payment to the Employees Retirement System of Alabama (ERSA) and the Teachers Retirement System of Alabama. At the time, the theater circuit said it had cash-on-hand of $2.2 million.

In an interview, iPic CEO and founder Hamid Hashemi told Variety the company had secured $16 million debtor-in-possession (DIP) financing from the Teachers Retirement System of Alabama. The loan carries an interest rate of 10.5%. That funding will be used to pay staff and keep iPic’s 16 locations open and operational.

“It’s business as usual,” said Hashemi. “We’re going to continue showing movies. We’ll have the same management team. The same membership program. Our guests can expect the same level of service. This is a restructuring of our balance sheet. It’s not an operational issue.”

Hashemi said that the two million members of iPic’s loyalty program will not be impacted and stressed that the company will honor gift cards and will continue to uphold its advertising partnerships on its pre-show programming. He acknowledged, however, that its 444 holders of the company’s common stock risk losing some or all of their investment.

Popular on Variety

iPic has been publicly traded since February 2018, raising $15.1 million with its initial offering. The company lost $9.3 million during its most recent quarter on revenue of $30.2 million. Year-over-year its losses mounted as its revenues slipped. For the same quarter in 2018, iPic posted losses of $6.4 million on revenues of $38.7 million.

Hashemi blamed the company’s financial issues on increased competition in the luxury theater space. In recent years, AMC, Regal, and other chains have followed iPic’s example by outfitting locations with recliner seats and by offering alcoholic beverages and high-end food items at certain venues.

“When we started this business back in 2007 there was nobody doing this type of dine-in, affordable, luxury experience,” said Hashemi. “Eventually the rest of the industry woke up. Our model inspired others to upgrade their circuits and the competition became more fierce.”

He also said that the company had struggled to build new venues at the pace it had anticipated. It initially wanted to open 25 locations in four to five years, but fell short of that goal. Hashemi noted that iPic had hoped that construction on its locations would take two years, but iPic theaters in New York City and Delray Beach, Florida took five and six years to build, respectively.

“We were not able to ramp up as quickly as we would like and a big part of that had to do with the development cycle,” said Hashemi.

If it sells, the iPic CEO said the company could be an attractive target for a private equity player or a strategic investor such as another exhibition chain.

“The range of suitors is wide and we’ve had a lot of interest in the past,” said Hashemi.

In its initial filings, iPic estimates its total debts are $290.9 million and its total assets are $157 million. The company’s list of unsecured creditors includes the law firm Yetter Coleman LLP with $2.9 million in claims, as well as Walt Disney Studios with $1.3 million in claims, Sony Pictures with $668,723 in claims, Universal Film Exchanges with $124,740 in claims, and Paramount Pictures with $122,196 in claims. The company also lists a $1.5 million class action settlement among its unsecured creditors.

Pachulski Stang Ziehl & Jones LLP is serving as legal counsel and Aurora Management Partners is serving as financial advisor as iPic navigates a restructuring process it anticipates will conclude in 90 to 120 days.

More Film

  • The Salt of Tears

    'The Salt of Tears': Film Review

    Handsome twentysomething Luc is a trainee joiner, a craft inherited from his doting single dad: a man at once proud of his son’s continuation of their trade, and hopeful that he’ll do something greater with it. When Luc asks his father if he ever wanted to design furniture rather than simply build it, the reply [...]

  • Time to Hunt

    'Time to Hunt': Film Review

    As context for those unaware, South Korea does not have the equivalent of the United States’ Second Amendment. Instead, the country enforces strict gun control — privately owned weapons must be stored at the police station — and fatal shootings hardly ever happen there. That’s important to know when watching Korean movies: It explains why [...]

  • SF Studios, Cinematic Inc. Join Forces

    SF Studios, Cinematic Inc. Join Forces on 'Comet in Moominland,' 'When the Doves Disappeared,' 'Omerta'

    SF Studios is joining forces with Antti J. Jokinen’s leading Finnish production banner Cinematic Inc. to develop and produce the animated feature “Comet in Moominland” and “When the Doves Disappeared,” adapted from Sofi Oksanen’s bestseller. “Comet in Moominland” and “When the Doves Disappeared” are being made by both companies as part of a five-picture deal. [...]

  • Tiger Rising

    Exclusive First Look: 'The Tiger Rising' Starring Queen Latifah

    Queen Latifah and Madalen Mills star in Ray Giarratana’s “The Tiger Rising.” The drama is based on Kate DiCamillo’s New York Times Bestselling children’s book and produced by Deborah Giarratana and Ryan Donnell Smith.  Highland Film Group is handling worldwide sales, which are under at the European Film Market in Berlin. The Tiger Rising” is [...]

  • The Berlinale Bear is Seen in

    Berlinale Enlivened by Anti-Chile State Violence Protests

    A politically charged Berlin Film Festival was further enlivened on the third day of the European Film Market by a demonstration targeting Chilean armed forces. On Saturday, the Martin Gropius Bau, the site of the EFM, saw a group of anonymous protestors unfurl a big banner from one of the market’s upper floors, with activists [...]

  • Vadim Perelman, Ilja Zofin, Lars Eidinger

    'Persian Lessons' Eidinger, Perelman Say Film Offers Parallels for Today

    Director Vadim Perelman and frequent Berlinale film star Lars Eidinger on Saturday championed their new Holocaust-set “Persian Lessons” as a timely, very German tale of how that dark history is closer to us than it seems, made uniquely possible by the fact that most of the film’s production team is not German. The film’s world [...]

  • Uppercase Print

    'Uppercase Print': Film Review

    History is a fanged presence in Romanian director Radu Jude’s recent films. Since 2015’s “Aferim!,” in both fiction and nonfiction formats, culminating in the heady tangle of the two approaches that was 2018’s remarkable “I Do Not Care If We Go Down In History As Barbarians,” Jude has interrogated various incidents and epochs in his [...]

More From Our Brands

Access exclusive content