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Seating Manufacturer VIP Cinemas Bites The Dust

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  • Seating Manufacturer VIP Cinemas Bites The Dust

    News Story Link

    Movie Theater Seating Manufacturer VIP Cinemas Shuts Down for Good Due to Pandemic

    April 3, 2020, 4:29 PM EDT

    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.

    “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.

    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.

    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.

  • #2
    another part of this seemingly endless domino chain. thoughts go out to all the employees.

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    • #3
      Corona virus or over expansion? They were already in Chapter 11. Maybe they could have gotten through if the pandemic hadn't hit, but they had a compromised financial immune system.
      And yes, thoughts go out to the employees, who, living in Mississippi, are screwed.

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      • #4
        A lot of outfits that were close to the edge before will get the final push from the virus stuff.

        I saw a statistic earlier today that stated that 44% of small businesses expect to be permanently closed if the shutdown lasts for one more month from now. Whether that actually happens is another story but that's based on what the owners of those businesses said in response to a survey.

        And now I can't find that article again. Shucks.

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        • #5
          I'm wondering if our local AMC theater (formerly Carmike) will be able to re-open after this pandemic dies down. AMC was already in bad financial shape before this crisis. The latest developments make the situation look pretty grim. I'm also wondering about the viability of other businesses, such as big retailers that were already struggling. Our local mall (an indoor relic from the 1970's) already lost one anchor tenant, Sears, a couple years ago. Now JCPenney is on the brink. I think if our JCPenney store closes then Central Mall itself could shut down completely. I can't see Dillard's being enough of a draw to keep that place afloat.

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          • #6
            Small restaurants are particularly vulnerable, many live their entire lives on immediate cash flow. Unfortunately, though some figure that "small" business employs up to 70% of the population, what tends to happen is the big entities get the bail outs. Ironically, these are the ones most likely to be more viable for people to buy up the assets and re-employ those skilled people under better management. Presumably that could happen here if competitors see the value (unlikely this company gets bailed out). But these big companies that get "rescued" (say a Bombardier up here in Canada) just turn into the worst zombie companies, beholden and dependent on crony welfare and a true waste of real skill and talent under terrible management and business models. It's not going to be good.

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