Luxury theater company may file for bankruptcy
Delray and Boca’s luxury IPIC movie theaters are still screening blockbusters, but for how much longer is uncertain.
The company hinted that it may need to file for Chapter 11 bankruptcy protection in a filing with the Securities and Exchange Commission that was released at the end of July.
The filing states that IPIC failed to make a $10 million interest payment due on July to the Teachers’ Retirement System of Alabama, a pension fund for Alabama’s teachers. It also states that the company has $204 million of debt under a credit line offered through the pension fund.
The filing states the company only has $2.2 million in cash, which is not enough money to cover its debts. IPIC has not been declared in default yet.
The pension company RSA holds 39.2 percent of IPIC’s stocks, according to the filing. The stock traded at just $1 once the release went out.
If the company goes through with a Chapter 11 bankruptcy reorganization, its equity IPIC officials have not responded to phone calls or emails despite numerous attempts.
The Delray IPIC location opened just a few months ago. It recently requested permission to apply to add a restaurant to the rooftop. It is unclear what will happen to that request.
The Delray location is not owned by IPIC anymore. After the deal to purchase the former chamber and library location from the Community Redevelopment Agency closed, IPIC assigned the property to a new business entity, 4th and 5th Avenue LLC, which is led by IPIC CEO and founder Hamid Hashemi and Samuels & Associates, the builder of the project.
Part of the deal to open in Delray involved IPIC moving its corporate headquarters from Boca to Delray. It is unclear what will happen now and what the recourse for not moving would be.
The company’s financials have been slipping. IPIC reported its net losses grew from $6.4 million to $9.3 million in quarter one of this year and that its revenues declined from $38.7 million in 2018 to $30.2 million.
In a statement Hashemi attributed the “slower-than expected start” in 2019 to the government shutdown and bad weather at high-volume theaters. He then said he produced that more internal controls over cost and the company’s membership rewards program would help yield better results.