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| Cineworld Renfrew Street Photo: Stephen Sweeney, licensed under Creative Commons |
Cineworld Group Plc. is filing for bankruptcy, the Wall Street Journal revealed today. The company, which is the world's second largest operator in the cinema sector, was unable to recover following the impact of Covid-19 lockdowns, with many former customers continuing to stay away.
It is understood that the company has engaged lawyers from Kirkland & Ellis LLP to handle the bankruptcy proceedings.
The decision follows a frantic week of activity which saw that company scrambling for a solution as its share price fell by 40%. This contributed to a total fall of 90% since the start of the pandemic and took the share value to its lowest since 2007. In March of this year it described itself as facing "a very challenging market." Large deals for leading titles left it with heavy debts and it struggled to manage the repayments. It was also heaving impacted by an Ontario court judgement which required it to pay C$1.23 billion in damages to Cineplex, a judgement which it was endeavouring to appeal.
Cineworld employs 30,432 people across its outlets. At present their future is unclear, but the chain is understood to be in negotiations as it tries to work out the best way to bring its operations to an end.
