Movie theater seating manufacturer VIP Cinemas, described as the world’s largest manufacturer of luxury reclining movie theater seats, on Friday decided to shut down for good due to the coronavirus pandemic.
The company scrapped plans for a Chapter 11 restructuring after laying off 310 employees last month. On a telephone conference call on Friday, the manufacturer told Bankruptcy Judge Mary F. Walrath that, due to the pandemic’s profound impact on movie theaters worldwide, its restructuring plan was no longer feasible, according to law360.
“We are truly living in an unprecedented time,” said VIP attorney Cristine Pirro Schwarzman of Ropes & Gray LLP. The board of directors made the determination that VIP’s business was no longer viable, as moviegoing has come to screeching halt and theaters will not likely open again in the immediate future, said Schwarzman.
There was no way for the manufacturer to secure capital to continue operations and proceed with its restructuring plan so the decision was made to shut down operations and monetize its assets for distribution to creditors, Schwarzman told the judge. The manufacturer is expected back in court later in the month as it winds down operation and the remaining administrative matters in its Chapter 11 filing.
According to the manufacturer’s website, VIP Cinemas launched in 2008 as a residential furniture manufacturer in New Albany, Mississippi, a town deeply rooted in the furniture industry for more than 160 years. In 2012, the company pivoted business strategies and launched luxury recliner seating for movie theaters. In 2015, the company expanded to a 900,000 square foot complex to become the largest manufacturer of luxury cinema seating in the world. Last year, the company opened global offices in the UK and Dubai as part of global expansion.
Pamela Chelin contributed to this report.