Carmike Cinema file Bankruptcy

Wednesday, August 9th 2000, 12:00 am
By: News On 6

WILMINGTON, Del. – Carmike Cinemas Inc., the struggling No. 3 U.S. movie-theater chain, filed for bankruptcy protection from creditors less than a week after failing to make $9 million in interest payments to bondholders.

The chain listed $841.1 million in assets and $652.8 million in debts in its Chapter 11 petition Tuesday in U.S. Bankruptcy Court in Delaware. Carmike is based in Columbus, Ga.

There has been a recent wave of bankruptcy filings by smaller theater chains faced with competition from the Internet and megaplex movie houses. In May, art-film theater chain Silver Cinemas filed for Chapter 11 in Delaware.

The theater business "is clearly suffering from overcapacity," said Christopher Dixon, an analyst at PaineWebber who follows the industry.

"But I'm a little surprised by Carmike because they seemed to have sufficient cash" to continue operating, Mr. Dixon said.

Carmike officials decided a bankruptcy filing was the best way to "achieve a successful restructuring of our business," said Michael W. Patrick, the company's president and chief executive.

Carmike executives said last week that its senior lender, identified by an analyst as Wachovia Corp., blocked payment of $9 million in interest due Aug. 1 on senior subordinated notes. The company said it will try to renegotiate the terms of its loans.

Carmike has 436 theaters in 36 states, including 18 in Texas.

Carmike shares were unchanged at $2 on the New York Stock Exchange before trading was halted earlier Tuesday.