On December 8, 2020, Daily Business Review quoted Glenn Moses on lifting the first movie theater out of COVID-19 bankruptcy in South Florida.
According to the article, Cinemax has become the first cinema in the United States to emerge with a restructuring plan after filing for Chapter 11 bankruptcy protection in Miami during the COVID-19 pandemic. It was a resolution that took creative thinking and compromise.
Cinemex Holdings USA Inc. operates more than 40 luxury movie theaters known as "CineBistros." It had been a multi-million-dollar enterprise until its entire revenue stream was cut off amid mandated shutdowns over COVID-19 concerns at the beginning of the pandemic. This created an unprecedented environment for businesses and landlords who had to answer to obligations and creditors.
Moses represented several landlords in the case and soon realized "the parties needed to get a little creative with respect to the restructuring. Key to the success of a lot of these restructurings is not only getting an influx of a lot of money, but also, it's important to have agreements with the landlords going forward," Moses said.
With no legal route for debtors to modify a lease under the bankruptcy code, it all came down to the parties. After several days of negotiations, the majority of landlords who rented space to Cinemax theaters agreed to edit the terms of their leases and allow extra time. The solution allowed Cinemax to salvage 32 of its 41 leases by sharing risk and stopped the landlords from losing their tenants.
Moses, counsel to the landlords, called it a significant but challenging case. "We're obviously pleased on a host of different levels that the company was able to restructure its obligations and be allowed to operate their movie theaters once the world reopens and it's safe to do so."