Theater chain files Chapter 11 bankruptcy

Mathis Winkler

NEWPORT BEACH -- Edwards Theatres Circuit Inc., the popular Newport

Beach-based company that operates a massive chain of movie theaters

throughout Southern California, filed a voluntary petition for

reorganization in U.S. bankruptcy court in Santa Ana on Wednesday.

Filing for Chapter 11 reorganization will freeze payments on the

70-year-old company’s debt. It owes $215 million in secured debt to a

group of banks and $36 million in trade debt to vendors and movie

studios, said Ann Julsen, a spokeswoman for Edwards Theatres.

“This gives them time to continue to operate their business while they

work out a plan to pay back their creditors,” she said.

She would not reveal the company’s operating budget, adding that as a

private business it was not required to do so.

W. James Edwards III, the company’s chief operating officer, and other

family members attended employee meetings Wednesday and could not be

reached for comment.

A surge in new multiscreen “megaplexes” during the past several years

has put a strain on the company’s health, officials said.

In June, Edwards Theatres opened an 18-screen complex in San Diego,

billed on the company’s Web site as the “most state-of-the-art AND

comfortable movie house you will ever visit.” A 20-screen theater is

scheduled to open in South Gate the fall.

“Public demand for state-of-the-art stadium megaplexes and lack of

attendance at the older non-stadium theaters has placed tremendous

financial pressure on existing theater chains,” said Stephen Coffey,

president of Edwards Theatres.

Tuesday night, the company closed four theaters in Rancho Cucamonga,

Stanton, Temecula and a separate one in San Diego other than the newly

opened movie house. It still operates 70 theaters in Southern California,

Idaho and Texas.

The remaining theaters will stay open during the restructuring

process, said Julsen, adding there may be more theater closings as a

result of the changes in the future.

Employees and vendors will continue to be paid, Julsen said, adding

that most of the 50 employees working at the closed theaters had been

offered jobs in other locations.

Edwards Theatres officials said they also intend to seek court

approval to honor policies regarding gift certificates, movie passes and

other customer programs.

The company operates three movie theaters in Newport Beach and four in

Costa Mesa.