iPic Entertainment Files Chapter 11 Bankruptcy amid Crisis
iPic Entertainment, a luxury theatre chain which provides out of the world theatre experience filed for chapter 11 bankruptcy for restructuring purposes. Mr. Hamid Hashemi founded iPic Entertainment in 2010 to provide a luxurious in-theatre dining experience to viewers. Currently, iPic is functioning in 16 locations across nine states and has a total of 123 movie screens. The company has around 240 full time and about 1,770 part-time employees.
The company’s profit started to plummet in 2017. It incurred a loss of 57 million USD in the year 2018 alone. In the latest quarter, the company incurred a loss of 1.26 USD a share i.e. 9.3 million USD in total. Last month, the company missed an interest payment of 10.1 million USD to the Teachers Retirement System of Alabama & the Employees Retirement System of Alabama. The company, at that time, had 2.2 million USD cash on hand and hence, was unable to make the payments. High capital cost along with delayed development cycle, depleted the company’s resources and was unable to become independent. Hashemi explained that Delray beach (Florida) related delays had resulted in unforeseen costs and a significant slowdown in development and new openings. Due to the cumulative effect, the company filed for chapter 11 bankruptcy on Monday. iPic plans on selling its assets or reorganize itself so that it would come out with a new capital structure and a healthy balance sheet. iPic is presently in talks with numerous parties for restructuring its debts which approximately stacks to a staggering 205 million USD.
The company blamed Hollywood for the type of movies that are being released for poor sales. It also said that the January Government shutdown and bad weather in February affected the sales. High prices of tickets, i.e., three times that of national ticket average of 9 USD is one of the reasons why people do not prefer iPic. The company plans on keeping its theatres open during this transition. It also plans on paying its employees during this period. The company plans on overcoming this storm and bouncing back with a renewed attitude.