The debtors are burning cash like Rick Dalton burns interlopers bursting into his Hollywood Hills mansion. The company said it had sold more than 1 million chairs. Under the terms of the plan, the first-lien lenders will receive their pro rata share of $60 million of preferred stock and 10% of the common stock of reorganized VIP Cinema (prior to dilution by a management incentive plan) on account of their first-lien claims. VIP, which was founded in 2008, has grown to become the largest provider of the chairs with 70% of the market. The company at its peak employed more than 550 people in New Albany, where they could produce up to 1,000 chairs a day. Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. The restructuring support agreement will (a) convert first lien loans to preferred and common equity, (b) donut the second lien claims, and (c) donut the general unsecured claimants (unless they opt-in to a release, in which case they’ll get $5k). Cinemark replaced 1,384 seats to 613 for its eight auditoriums. manages more than $35 billion in equity capital, according to its website. We encountered an issue signing you up. In addition, (a) the majority shareholder will receive both preferred stock with an initial stated value of $7 million and 51% of the common stock (prior to dilution by a management incentive plan) in exchange for providing $7 million in equity financing and entering into a new management services agreement with reorganized VIP Cinema following emergence from bankruptcy; (b) the second-lien lender will receive preferred stock with an initial stated value of $2 million and 25% of the common stock (prior to dilution by a management incentive plan) on account of $2 million of new money term loans. Send Feedback to petition@petition11.com. The mergers and acquisitions team includes partner Harold Birnbaum and associate Doug Howell. Court approval is required. You can change your choices at any time by visiting Your Privacy Controls. Spitzer said that after the restructuring, “VIP will be well-equipped to succeed in the competitive consumer landscape.”. VIP Cinema is a pioneer and one of the largest manufacturers of luxury seating products for movie theaters. Read more about cookies here. Here’s the company explaining one of the reasons why it’s in trouble: “Continued proliferation of online streaming services and alternative viewing experiences, which has led to declining movie attendance, a poor outlook sentiment for the overall U.S. movie theatre industry and particularly put significant pressure on the stock price of AMC, a key customer for the Company.”. It invested $62.5 million in VIP in 2017, Spitzer said. New Chapter 11 Bankruptcy Filing - VIP Cinema Holdings Inc.. Domestic box office sales fell to $11.45 billion last year, down from a record $11.88 billion in 2018. It hopes to emerge from bankruptcy by mid-April. (Reporting by Jonathan Stempel in New York; Editing by Richard Chang). Raykjuan Holmes, an employee with RU Theatre, a full service theater installer based out of Charleston, South Carolina, installs new reclining seats from VIP Cinema Seating in New Albany, inside one of the theater's at Cinemark in Tupelo in 2017. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. PETITION is a digital media company focused on disruption from the vantage point of the disrupted. It said it has a 70% share of the U.S. market for luxury movie theater seating. Policies: Curation, Terms of Use, Privacy Policy & Disclaimer. © 2020 National Post, a division of Postmedia Network Inc. All rights reserved. VIP. Critical to everything is the fact that HIG Capital LLC, the existing shareholder in the company, will write a new-money check of $7mm and enter in a management services agreement with the reorganized newco. Here’s the problem: end user customers stopped ordering their stuff. VIP Cinemas, described as the ... Spitzer expressed confidence the company will be "well-equipped to succeed" following its restructuring, Reuters reported. That hope was extinguished when Odeon reduced seating orders, napalming everyone’s financial models upon which the proposed out-of-court transaction was premised. Movie theaters slowed down their renovation activities and construction of new locations. Here’s the problem: end user customers stopped ordering their stuff. Yup, that’s right, there’s a finite market for luxury seating in movie theaters. Spitzer also said the company's belief that theaters would replace chairs sold and installed in 2012 and 2013 was incorrect, as movie attendance has fallen and theater companies would extend the replacement cycle. The ViP lounge opens 45 minutes before the advertised start time as shown on your ticket. Who knew? The next issue of Posted Newsletter will soon be in your inbox. Movie theater seating manufacturer VIP Cinemas, described as the world’s largest manufacturer of luxury reclining movie theater seats, on Friday decided to … VIP Cinema, which makes luxury movie theater seating, files for bankruptcy, tap here to see other videos from our team. NEW ALBANY – VIP Cinema Seating, the largest maker of luxury reclining seats for movie theaters, filed for Chapter 11 bankruptcy protection, Reuters reported. There was a problem saving your notification. All members of the Davis Polk team are located in the New York office. VIP Cinema also offers an array of movie-theatre services, including seat cleaning and reupholstering, seat and slipcover installation, and the provision of replacement parts. Pursuant to the restructuring support agreement, the ad hoc group of lenders also backstopped VIP Cinema’s debtor-in-possession financing facility in the aggregate principal amount of $11 million, which consists of $13 million of new money term loans and $20 million of roll-up term loans. With headquarters, offices and services across the United States, the United Kingdom and Dubai, and its provision of goods and services to many of the leading movie theatres across the world, including AMC theaters, VIP Cinema has a broad domestic and global reach. Sign up to receive our top headlines each morning. This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Comments may take up to an hour for moderation before appearing on the site. Now we’re in prepackaged bankruptcy territory with a restructuring support agreement that will shed $178mm of debt and infuses the company with a $33mm DIP credit facility — of which $13mm is new money and $20mm is a roll-up of prepetition debt. Speaking of burning cash, that’s pretty much what you can say about the $200-or-so-million that previously went into these debtors. Error! Success! In filings with the U.S. bankruptcy court in Delaware, VIP said its Chapter 11 reorganization would hand control to its lenders and private equity firm H.I.G. From meetings to private movie screenings to worship, we can handle any short or long-term rentals you need. By continuing to use our site, you agree to our Terms of Service and Privacy Policy. Visit our Community Guidelines for more information and details on how to adjust your email settings. Our auditoriums can accommodate … Restructuring of VIP Cinema Holdings, Inc. Posted February 21st, 2020 for Davis Polk Davis Polk is advising an ad hoc group of lenders under VIP Cinema Holding, Inc.’s first-lien term loan facility and first-lien revolving credit facility in the chapter 11 restructuring of VIP Cinema Holdings, Inc. and certain of its affiliates andsubsidiaries (collectively, “VIP Cinema”). Replacing seating at theaters costs around $500,000 or more, depending on the size of the facility. The Malco project alone was valued at nearly $1 million, as it replaced 1,745  seats to 1,012 reclining seats in its 10 auditoriums. They conquered the total addressable market, securing 70% market share with little to no room to grow thanks to all of the foregoing bulletpoints. But it said it had been hurt by a slowdown in the number of screens, a drop in box office sales and a longer replacement cycle of the chairs. You are encouraged to relax in our exclusive lounge prior to the start of your film. H.I.G. But according to Reuters, Chief Restructuring Officer Stephen Spitzer said the premium recliner market had by 2017 “reached a near saturation point” following theater upgrades, and the number of new screens has since remained “relatively flat.”. The company replaced the seating in the Malco and Cinemark theaters in Tupelo in 2017 and 2018. . VIP Cinema Holdings, the largest maker of luxury reclining seats for U.S. movie theaters, on Tuesday filed for bankruptcy, citing a glut of seating as box… To enable Verizon Media and our partners to process your personal data select 'I agree', or select 'Manage settings' for more information and to manage your choices. An awesome 50+-foot screen and state-of-the-art audio visual technology will take your presentations to the next level. Unauthorized distribution, transmission or republication strictly prohibited. On February 14, 2020, the ad hoc group, second-lien lenders, the majority shareholder, and VIP Cinema enteredinto a restructuring support agreement, which contemplates a balance sheet restructuring pursuant to which VIP Cinema will seek confirmation of its prepackaged plan of reorganization, which embodies a debt-to-equity transaction. V ceně VIP vstupenky máte neomezenou konzumaci teplého a studeného bufetu, popcornu, nachos a nealkoholických nápojů. Perhaps people are engaging in too much Netflixing and chilling and not enough movie-going. VIP was founded in 2008 in New Albany, Mississippi, as a residential furniture maker, and moved its corporate offices to St. Louis last year. If you don't see it please check your junk folder. Also, people are engaging in too much Netflixing and chilling and not enough movie-going. The Davis Polk restructuring team includes partner Damian S. Schaible, counsel Jon Finelli and associates Adam L. Shpeen and Gene Goldmintz. Either that or people are engaging in too much Netflixing and chilling and not enough movie-going. A welcome email is on its way. On February 14, 2020, the ad hoc group, second-lien lenders, the majority shareholder, and VIP Cinema enteredinto a restructuring support agreement, which contemplates a balance sheet restructuring pursuant to which VIP Cinema will seek confirmation of its prepackaged plan of reorganization, which embodies a debt-to-equity transaction. Here are some of the problems this company confronted: They made chairs that were too good. The finance team includes partner Jinsoo H. Kim and associate William Son. Too good. Movie theaters reduced capital investment — mostly because they haven’t exactly performed very well themselves and have their own debt and equityholders to contend with. The move will help preserve 373 jobs, the company said. ViP - MAKE A SPECIAL OCCASION EXTRA SPECIAL. On February 18, 2020, VIP Cinema filed its voluntary chapter 11 petitions in the United States Bankruptcy Court for the District of Delaware. Counsel Stephen I. Brecher provided executive compensation advice. He also said VIP’s initial belief that seats it sold in 2012 and 2013 would need replacement by now was incorrect, in part because box office and theater attendance have fallen, and the company now expects a “much longer” replacement cycle. Our primary product is an a$$-kicking email briefing sent to Members every Sunday. The restructuring support agreement is supported by more than 70%of the prepetition first-lien lenders, the sole voting class under the proposed plan. Join below today. An email has been sent to with a link to confirm list signup. H.I.G. VIP chairs are familiar to Northeast Mississippi moviegoers. 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