(CNN) — Alamo Drafthouse, the movie theater chain beloved by fans for its boozy milkshakes, theme nights and strict no-talking rules, has filed for bankruptcy protection.
The Austin-based company, which owns about 40 theaters in the United States, filed for Chapter 11 and agreed to sell “substantially all its assets” to a group of lenders. Alamo put the blame for its bankruptcy on the pandemic, which has temporarily shuttered movie theaters in several states.READ MORE: 10-Year-Old Diego Velasquez Recovering After Cars Hit Him While Out Buying Mother’s Day Gift
Operations will continue as normal, however. Alamo said the deal will provide “much-needed incremental financing to stabilize the business during the pandemic, which has had an unprecedented and outsized impact upon the movie theater and dining industries.”
The purchasers include Alamo founder Tim League, some of the company’s original investors and two financial firms.
Alamo is permanently closing three locations, including a theater in its hometown of Austin, as well as outposts in Kansas City, Missouri, and New Braunfels, Texas. Development of an Orlando, Florida, location will also be “permanently ceased.”
Additional locations might also close as the company evaluates the “health of all leases” during the Chapter 11 filing.READ MORE: 'This Is Not Just Any Usual Recovery': Economist Explains Rash Of Price Hikes, Product Shortages
But League said in a press release that he’s optimistic for Alamo’s future.
“Because of the increase in vaccination availability, a very exciting slate of new releases and pent-up audience demand, we’re extremely confident that by the end of 2021, the cinema industry — and our theaters specifically — will be thriving,” he said.
Alamo isn’t alone in its optimism about 2021. AMC Theatres CEO Adam Aron recently told CNN Business the world’s largest theater chain has raised enough money to survive this year based on the “assumption that moviegoing will pick up in the second half of 2021.”
Two major cities are soon reopening its theaters, too. New York City locations can reopen at a limited capacity Friday and Los Angeles is also close to reopening as infection rates decline.MORE NEWS: 3-Year-Old In Critical Condition After Man Opens Fire Outside Dallas Gas Station
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