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Here's an article I found about it all:

EXHIBITOR CARMIKE FILES FOR CHAPTER 11

State of the industry caused financial woes, others may follow

By JILL GOLDSMITH

Things took a nasty turn in the beleaguered movie theater biz Tuesday as
Carmike Cinemas, the nation's fourth-largest exhibitor, filed for Chapter 11
and the biggest chain in the country, Regal Cinemas, hinted that it might not
be
far behind.

"Things are bad in the sector, but they're about to get worse," said analyst
Daniel O'Neill of Credit Suisse First Boston. "You can't keep pouring capex
into a no-growth business," he added. He means the capital expenditure on
new theaters that has lifted the nation's screen count to untenable levels.

Atlanta-based Carmike still has some cash on hand but said senior lenders
blocked it from making an interest payment since it violated loan covenants
that require it to maintain certain financial ratios. That generally refers to
a
debt-to-equity ratio -- which has been leaning heavily towards the debt side at
Carmike and most of its competitors for the past several years.

Carmike opted for Chapter 11 after careful consideration "of our current
circumstances and the state of our industry," company chairman Michael
Patrick said. "Our focus is on preserving our assets and improving our
operational strength during this difficult period."

United Artists, generally considered to be in the worst shape of the bunch, is
currently hashing out new arrangements with its senior lenders. And Regal said
it hopes to do the same by end the of the third quarter. AMC Entertainment is
hurting as well, as is Cinemark and, to a lesser extent, Loews Cineplex.

The group is staggering under an enormous debt load from building expensive
new multiplexes across the country, even as attendance in the theaters is flat,
and in some cases, down. June was dismal, and competition from the
Olympics in September will kill fourth-quarter comparisons as well.

And the new locations are cannibalizing the old ones, which are being closed
down much too slowly.

There are about 37,000 screens in the U.S., and most agree, including the
exhibitors themselves, that the number needs to fall to 25,000 for the industry
to breathe easy again. Exhibs have slowed down their building, but have not
stopped it. The screen count was up 9% last year and will be up an estimated
4%-6% this year, as exhibs apparently keep spotting markets that are
screaming for a new multiplex.

It's an example of how "individually rational decisions led to collectively
irrational behavior," O'Neill said.

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With Regal doing so bad, adding 36 screens to the Twin Cities market might not be their smartest move. Carmike just built a 20 screen in a nearby city that already has a 20 screen complex and I believe two other smaller theaters. WHY? WHY? WHY? I ask.

However, it must be remembered that it has not been the same company since they hired Frank Stry-something from AMC. It seems that they have become very similar to AMC in the way they do business. This quite frankly, no pun intended, scares me.

I am glad to see Neil Stolberg in charge of operations. When he was out west, he did an excellent job. I like the company and hope they do well.

GCC has made pleanty of cutbacks as you've mentioned. But I think GCC closed most of their worst houses early and stopped building in the nick of time, while other's (mainly all other's listed in the above article) are still building.

Other cutbacks include cutting down on Union hours in the booth. This is why I am no longer an IATSE local and took on a Management job with GCC. All our locations got cut to 40hrs or less for the union. Which I guess is a smart move on their part (besides my complaint of losing %5/hr) because if Carmike and Regal can't make it paying thier Manager/Operators $7-8.00/hr, I know I made over twice that as a Union operator.

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The company announced late Thursday that a federal bankruptcy court in Delaware approved its amended Chapter 11 reorganization plan, which will become effective the middle of this month.

The national movie theater chain, which is based in Columbus but incorporated in Delaware, has been in bankruptcy court since Aug. 8, 2000.

Chief Financial Officer Martin Durant in Columbus said in a prepared statement the company has improved its operating position during the 17-month Chapter 11 process.

"The company was able to terminate leases and close more than 130 unprofitable theatres, as well as reduce costs, streamline management responsibilities and restructure rents on other theatres to improve the profitability of such theatres," Durant said. "As a result, the company operates on a more efficient, effective basis and constitutes a more attractive, viable theatre circuit."

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