Operator of Isis files bankruptcy
The corporation that shows the movies at Aspen’s Isis Theatre has filed for bankruptcy in federal court in Los Angeles.
A hearing was scheduled Thursday before Judge Erithe Smith to hear a motion requesting consolidation of bankruptcy proceedings for Resort Theaters of America Inc. and its three affiliates. One of the affiliates, RTA Aspen Inc., was also seeking permission to pay up to $100,000 to film distributors immediately in order to keep its operation at the Isis going.
Meanwhile, the Isis is open for business, with five major releases and one independent film on its schedule.
“It’s business as usual,” said Sharon McWilliams, a manager at the movie house.
Documents filed with the court list 27 film distributors that are owed money by RTA Aspen. The film companies are threatening to withhold the release of future films to the Aspen theater unless they are paid money owed prior to the Oct. 12 filing of a petition for Chapter 11 bankruptcy protection, according to a document filed with the court.
“Without new motion pictures to exhibit, the Debtor cannot operate its business, and must shut down its theater,” the document states.
Warner Brothers, for example, has advised RTA Aspen that unless the theater operator’s debt is paid in full by Oct. 26, it will not release any new films for showing at the Isis.
The Los Angeles-based attorneys for Resort Theaters of America could not be reached for comment yesterday on the outcome of the court hearing.
Resort Theaters of America is a Delaware corporation with headquarters in Los Angeles. Also sharing its corporate offices are three affiliates – RTA Aspen; RTA Desert Inc., which operates six movie theaters in southern California; and RTA Northern California Inc., which operates four movie theaters in that part of the state.
According to documents filed with the court, movie attendance has been below projections at the Isis this year. In addition, movie attendance nationwide has been below expectations since the end of last summer.
Movie attendance peaks in the summer and during the holidays, according to the court filings. During off-times, earnings can “fluctuate dramatically due to the presence or absence of successful or `blockbuster’ films.”
Exacerbating matters, according to the court filing, are the terms under which movie exhibitors pay for films. Distributors have recently accelerated the timing of the required license fee payments.
As a result, RTA Aspen was unable to pay its creditors and requires financial restructuring, according to a court document.
The Isis Theatre on Hopkins Avenue was long operated as a cozy one-screen movie house by Dominic and Kitty Linza. They sold the establishment in 1997, and it was redeveloped as a five-screen theater which reopened in December 1999.
RTA Aspen owns the theater business at the Isis, but not the building itself.
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