Regal Cinemas, known for its 4DX immersive theaters, reclining seats, and in-house bars, may soon be forced to shut down. Although the company raked in over $1 billion in 2021, Regal Cinemas’ owner, Cineworld, filed for bankruptcy on Sept. 7. 

Just like many other businesses around the world, the pandemic forced Cineworld to close its doors, causing a 65.1 percent fall in admissions, and around a 30 percent decrease in revenue over the past two years. With over 10,000 screens and 28,000 employees spanning several continents, Cineworld continued to pay their expenses. Two years later and the company has accrued over $5 billion in debt, causing them to file for Chapter 11 bankruptcy. 

Chapter 11 bankruptcy is often referred to as “reorganization” bankruptcy. The process begins with a petition with bankruptcy court, which can be filed by the businesses themselves or creditors that are in search of a return of investment. 

While Chapter 11 bankruptcies are usually the most costly form, they allow the business to “reorganize” the company, while continuing to operate and bring in income. However, they must propose a plan to keep the business alive and pay off creditors. Businesses are then given a five-year grace period to pay back these debts. If Cineworld is unable to recover from the bankruptcy within the five-year period, Regal Cinemas will be forced to be shut down, along with all its 10,000 screens.

In addition to COVID’s reduced admission rate, a Canadian court fined Cineworld, their largest exhibitor, a $1 billion penalty as a result of an aborted merger. Cineworld Group was supposed to acquire Cineplex, another theater company, but aborted nearly as documentation was complete. The Ontario Superior Court of Justice ruled a breach of contract occurred and penalized Cineworld $1.24 billion Canadian. 

“Without any legal right to avoid its contractual obligations, Cineworld intentionally chose to breach its obligations, including its obligation to seek timely regulatory approval for the Arrangement under the Investment Canada Act,” Cineplex released in a statement.

Compared to competitors like AMC, Cineworld has struggled post-pandemic, as AMC’s “meme stock” in August 2022 brought the company $587 million. AMC’s stock price as of September 2022 is $10.50, while Cineworld Group is $0.08. 

Not only has the chain faced issues during the pandemic, but competition from streaming services has taken a toll on the industry. According to FinanceBuzz, over 80 percent of U.S. households have at least one video streaming subscription, and with the release of movies like “Trolls: World Tour” directly to these services, cinema chains continue to miss out on revenue. 

“Regal is my absolute favorite theater,” said senior Daniela Mizrachi. “I watch movies a lot, and ever since I was a kid I have been going to the Regal in Oakwood. Hearing that they might go bankrupt is really sad.” 

In August 2022 alone, Cineworld shares dropped 60 percent, while still carrying a market value of around $69 million. With stocks on the fall, Cineworld faces closer danger of filing bankruptcy, a pure dilemma for Regal lovers across the country.