IPIC Theaters: Subchapter V Liquidation of Premium Theater Chain
ElevenFlo Research
March 23, 202622 min readUpdated July 21, 2026
IPIC Theaters, a dine-in movie theater chain operating thirteen leased locations, filed for chapter 11 protection under subchapter V on February 25, 2026, in the U.S. Bankruptcy Court for the Southern District of Florida (Case No. 26-12313). The debtor is pursuing an orderly liquidation rather than a reorganization, seeking to monetize its thirteen leased theater locations through sales, lease assignments, and consensual resolutions with landlords and other stakeholders. IPIC reported fiscal 2025 gross income of approximately $112.5 million alongside a net loss of approximately $19.4 million for the year. Total liabilities were approximately $113.9 million against a December 2025 book value of assets of approximately $155.3 million, though the debtor cautioned that liquidation values are lower than book value.
This is the second chapter 11 filing for the iPic brand. The predecessor filed in Delaware in 2019 with approximately $205 million in secured obligations, and two Alabama public pension funds acquired the chain's assets through a $51.8 million credit bid later that year. The company issued WARN notices to all approximately 1,300 employees at filing, and the case ultimately produced a mix of closures and going-concern sales across the debtor's locations, including asset sales to Cinemex Holdings USA and Blue Fox Theater, LLC. With all locations leased and near-zero funded secured debt, the case centered on theater-by-theater dispositions and maximizing recovery for a fragmented trade creditor base.
IPIC's predecessor, iPic-Gold Class Entertainment, LLC, and five affiliated entities filed for chapter 11 protection on August 5, 2019, in the U.S. Bankruptcy Court for the District of Delaware (Case No. 19-11737), jointly administered before Judge Laurie Selber Silverstein. The debtors were represented by Pachulski Stang Ziehl & Jones LLP, with Aurora Management Partners serving as financial advisor and PJ Solomon as investment banker. At the time of filing, the predecessor operated 16 theaters with 123 screens, employed approximately 2,010 workers, and listed $290.9 million in total debts, including approximately $205 million in secured obligations owed to the Retirement Systems of Alabama.
The predecessor's first-day declaration attributed the financial distress to intensifying competition as other exhibitors rolled out reclining-seat formats at lower price points, rising construction and buildout costs that tightened liquidity, and the NASDAQ offering's failure to raise sufficient capital for the company's expansion plan. iPic Entertainment Inc. had completed a Regulation A+ offering on the NASDAQ under the ticker symbol IPIC in February 2018, raising approximately $15.1 million — well below its $40 million target — before the stock fell below $2 as financial distress intensified. Revenue had peaked at approximately $148 million in fiscal year 2018, but same-store sales declined 21.7% by the first quarter of 2019.
Two Alabama public pension funds — the Employees Retirement System of Alabama and the Teachers Retirement System of Alabama — had provided a $204 million pre-2019 credit facility to IPIC before the 2019 filing. RSA provided $16 million in debtor-in-possession financing at 10.5% interest during the case. PJ Solomon contacted 64 potential acquirers, and 31 signed non-disclosure agreements. At an October 17, 2019 auction, iPic Theaters, LLC — a newly formed RSA affiliate — prevailed as the winning bidder with a $51.8 million credit bid structured as offset credits against prepetition and postpetition indebtedness, plus assumption of certain liabilities, defeating a $48.8 million competing bid from Cinemex Holdings USA. The Bankruptcy Court approved the sale on October 29, 2019, and the transaction closed on November 15, 2019. On that same date, founder Hamid Hashemi and three other executives resigned. The corporate ownership statement identifies the two pension systems as the current holders of 100% of the debtor's equity.
Less than six months after the acquisition, the COVID-19 pandemic shuttered nearly all U.S. theaters by mid-March 2020, with major markets remaining closed for approximately 12 to 15 months. The chain contracted from 16 locations and 123 screens at its 2019 peak to 13 locations across eight states by early 2026, having closed properties in Arizona, Illinois, and Wisconsin while opening one new location in Atlanta in December 2020.
Post-COVID Attendance Decline and Operating Losses
The case management summary states that the debtor chose the subchapter V path because the long-tail effects of the COVID-19 pandemic left theater attendance below pre-pandemic levels, while streaming platforms shifted consumer viewing habits away from theatrical exhibition. U.S. and Canadian box-office revenue in 2025 was 22.1% below the 2019 total. The domestic box office reached approximately $8.66 billion in 2025 but stayed roughly 24% below the pre-pandemic peak of $11.36 billion in 2019, and national admissions fell from approximately 1.23 billion in 2019 to roughly 716 million in 2025. The rapid expansion of streaming platforms — including Disney+, HBO Max, Peacock, and Paramount+ launching between November 2019 and March 2021 alongside Netflix and Amazon Prime Video — compressed the standard exclusive theatrical window from 90 days to approximately 30 to 45 days.
Revenue comes from both exhibition and in-theater dining. For fiscal year 2025, IPIC reported approximately $40.8 million of box office sales, $63.3 million of food-and-beverage sales, and $8.4 million of advertising and other revenue. Food-and-beverage revenue accounted for more than 56% of total gross income. For the 2026 fiscal year through February 20, those categories totaled approximately $5.0 million, $7.8 million, and $0.1 million, respectively. The company announced plans to pursue a court-supervised sale of its assets while continuing operations during the process. IPIC generated a net loss of roughly $19.4 million for 2025, with operating cash flow negative $12.5 million for the year-to-date period through the filing. RSA provided $13 million in owner contributions during that period.
Near-Zero Funded Debt and Lease-Dominated Balance Sheet
The debtor's December 2025 balance sheet, filed as part of the Section 1116 package on the petition date, reported total assets of approximately $155.3 million and total liabilities of approximately $113.9 million. The gap between total liabilities and the roughly $2.71 million in unsecured claims is largely attributable to approximately $102.4 million in operating lease right-of-use liabilities, which dominate the liability side. Key landlords include entities associated with Howard Hughes Corporation and Federal Realty Investment Trust.
IPIC entered bankruptcy with virtually no funded secured debt. The debtor stated it was unaware of secured claims other than a UCC-1 financing statement filed by Konica Minolta Premier Finance relating to leased equipment and liens held by AFCO Direct, a division of AFCO Credit/Acceptance Corporation, under two premium-finance agreements covering approximately $1.69 million in annual insurance premiums at 8.34% APR. The initial schedules, filed March 11, 2026, listed no secured creditors on Schedule D. RSA's 2019 credit bid eliminated approximately $205 million in prior secured obligations, leaving the current debtor without funded secured debt at the time of the 2026 filing. No DIP financing facility was sought in the 2026 case; operations were funded instead by theater revenue and RSA owner contributions.
Unsecured claims. Non-insider, non-contingent unsecured debt was estimated at approximately $2.71 million, and tax obligations at approximately $141,545. The list of twenty largest unsecured creditors shows a fragmented trade and services creditor base. US Foods holds the largest listed claim at approximately $247,000, followed by HVAC Mechanical Services of Texas (d/b/a Hunton Services) at $41,286, Washington State Department of Revenue at $34,600, ADP at $27,354, and Schindler Elevator at $14,450.
Cash position. The filing showed approximately $1.8 million in a concentration account, with de minimis or negative balances across several other operating accounts. A separate excess cash account holds funds from the Retirement Systems of Alabama and is drawn upon only when operational cash flow falls short. The debtor's fixed-asset base included approximately $6.2 million of projection equipment and screens, alongside leasehold improvements and concession equipment.
Theater Closures and the Cinemex-Star Grill Auction
WARN notices. IPIC issued WARN notices to all approximately 1,300 employees concurrent with the filing, indicating that continued employment beyond the notice period is not guaranteed. As of mid-March 2026, closures covering at least seven locations across five states have been confirmed, most effective April 28, 2026. Most of the confirmed closures carry that April 28 date. In California, the Pasadena theater at 42 Miller Alley accounts for 91 jobs and the Westwood location for 103 employees. A Maryland filing places the North Bethesda Pike & Rose closure at 116 employees, and a Washington notice puts Redmond at 64 employees. IPIC also filed a WARN notice covering its Midtown Atlanta theater and the attached Serena Pastificio restaurant and is reportedly seeking to sell the Serena concept to outside investors. In Florida, the debtor told the state it planned to close its — . The carries a later effective date of May 28, 2026, with 97 layoffs. The case management summary describes a theater-by-theater evaluation, with each location assessed for potential sale, lease assignment, or other monetization; the debtor has stated it intends to .
Bidding procedures and the Star Grill deal. IPIC moved on April 21, 2026 to establish bidding procedures for a sale of substantially all its assets, designating Star Grill Cinema, Inc. as stalking horse purchaser at $5 million for theater furniture, artwork, and equipment, the debtor's intellectual property, and specified contracts and leases tied to six locations — Houston, Dallas, Austin, Atlanta, North Miami-Intercoastal, and a New Jersey property. The proposed bid protections included a $200,000 break-up fee, expense reimbursement of up to $35,000, and a $100,000 minimum overbid increment. Judge Kimball entered the bidding procedures order on April 28, 2026, setting a May 5 qualifying-bid deadline, a May 8 auction, a May 11 sale-objection deadline, and a May 12 sale hearing. CMX Holdings USA Inc., owner of the competing CMX Cinemas dine-in chain, filed a $6 million competing offer styled as a "competing stalking horse" purchase agreement, one day after IPIC sought court approval to lock in the Star Grill deal and before the bidding procedures were even approved.
Auction and sale orders. At the May 8 auction, Cinemex Holdings USA, Inc. emerged as the winning bidder, with Star Grill Cinema designated backup purchaser under the May 13 sale order. The order does not itemize the final purchase price, though CMX's stalking-horse challenge had already set a $6 million floor above Star Grill's original $5 million bid, and the parties targeted a May 15, 2026 closing. The auction identified separate buyers for theater locations and intellectual-property assets.
Final dispositions. The theater-by-theater outcomes ultimately diverged from the original WARN notices. The Redmond, Washington location closed on its originally noticed date via a lease rejection order. The Pasadena location closed June 3, 2026 — later than the April 28 WARN date — after the debtor pursued a sale process rather than an immediate shutdown. Rather than closing, the Westwood, California location and a New York City lease were sold to Blue Fox Theater, LLC for $250,000 under a sale order entered June 5, 2026. The Fort Lee, New Jersey theater was not closed; it was included among the locations sold to Cinemex Holdings USA under the May 13 sale order, and Cinemex — operating as CMX Cinemas — said in mid-June 2026 that it would continue operating the acquired locations, including Fort Lee, under the IPIC brand. The disposition of the North Bethesda, Midtown Atlanta, Delray Beach, Boca Raton, and North Miami Beach locations was not separately confirmed as of this writing; the Cinemex sale order covered substantially all of the debtor's remaining locations not otherwise sold or rejected.
First-Day Operational Relief and Utility Objection
The first-day package sought authority to maintain cash management, pay prepetition employee wages and benefits, preserve utility service, honor customer programs, pay critical vendors, and continue insurance coverage.
Cash management. The debtor uses ten JPMorgan Chase bank accounts, four of which are dormant, with funds sweeping to a master operating account. The debtor reported approximately $2,700 in monthly bank fees, merchant fees of roughly 3.2% on credit-card transactions, approximately $4,374 per quarter for its Concur expense platform, and roughly $1,450 for the February 2026 legacy gift-card platform fee. Judge Kimball entered an interim cash-management order authorizing continued use of the existing system, and entered a final cash-management order on April 1, 2026, following the March 25 hearing.
Employee obligations. The debtor sought authority to address approximately $2.16 million of prepetition employee obligations, covering wages, salaries, commissions, and health-and-welfare benefits. The wages motion breaks this down across payroll arrears, accrued paid time off, expense reimbursements, and benefit contributions. The workforce comprised approximately 400 full-time and 900 part-time employees spanning executive and managerial personnel, site-level management, event sales staff, front-of-house employees, and back-of-house staff including chefs, theater technicians, and maintenance workers. The court approved an interim package of approximately $2.02 million under the interim wages order, and approved the remaining balance in a final wages order entered April 1, 2026.
Utilities. The utilities motion proposed adequate assurance deposits equal to roughly two weeks of utility expense for each provider, based on average monthly payments over the six months before the petition date, reduced by any deposits already held. Florida Power & Light Company and Consolidated Edison Company of New York filed a joint objection on March 18, 2026, arguing that the debtor improperly attempted to define the form and amount of adequate assurance itself, that the proposed segregated bank account is not a recognized form under Section 366(c)(1)(A), and that a two-week deposit is insufficient given billing cycles that allow approximately two months of service before disconnection. FPL sought a two-month cash deposit of $86,720 and Con Edison sought $61,931. FPL and Con Edison withdrew the objection on March 24, 2026 after reaching a settlement with the debtor, and the court entered a final utility order on April 1, 2026.
Customer programs. IPIC moved to continue honoring ticket refunds and exchanges, non-expiring gift cards, and its IPIC ACCESS rewards program. The customer programs motion describes a tiered loyalty structure: Silver membership is free, Gold membership carries a $39 annual fee, members earn one point per dollar spent, and 500 points can be redeemed for $5 of credit. As of January 31, 2026, the company reported 65 million outstanding IPIC ACCESS points. The debtor noted that the points have no cash value and are not redeemable for cash or cash equivalents, but argued that honoring these programs is necessary to preserve goodwill and protect going-concern value at individual locations. The Section 1116 balance sheet reflected approximately $1.13 million of gift-card deferred revenue, approximately $657,000 for member reward points, approximately $430,000 for loyalty memberships, and approximately $127,000 of event deposits. The court granted interim authority to maintain the programs.
Commercial card restoration. One week into the case, the debtor filed an emergency motion to restore its JPMorgan commercial card program, which had been suspended postpetition. The cards were used by 44 key employees across all 13 theaters for food and beverage procurement, IT subscriptions, licensing fees, and day-to-day operating costs. The prepetition credit line was $150,000, the outstanding petition-date balance was approximately $23,400, and average weekly usage was about $30,000. JPMorgan held a security interest or setoff right against the master checking account. The parties negotiated modified terms: $40,000 in availability, a $45,000 minimum account balance, continued weekly sweeps, and at least ten days' advance written notice before any termination. Both the subchapter V trustee and the U.S. Trustee had no objection. Judge Kimball approved the interim commercial card order on March 5, 2026.
Professional Retentions and Early Stakeholder Appearances
The debtor sought to retain Burr & Forman LLP as bankruptcy counsel, with Christopher R. Thompson and Derek Meek as lead attorneys. Thompson bills at $495 per hour, Meek at $698 per hour, and partner Marc Solomon at $653 per hour. The debtor paid Burr & Forman a total prepetition retainer of $550,000 — $300,000 on January 15, 2026, and $250,000 on February 25. Of that amount, $206,392 was applied against prepetition fees, with the remaining $343,608 held as an advance security retainer. The debtor filed an amended retention application on March 11, 2026, and the court approved it in a final order entered April 1, 2026, following the March 25 hearing.
Development Specialists, Inc. was retained as financial advisor and consultant for the liquidation process, with Joseph J. Luzinski as the lead DSI professional at $750 per hour. Other DSI professionals include Michael S. Grant at $565 per hour and Salvatore C. Arena at $295 per hour, with associates ranging from $195 to $345 per hour. DSI received a $275,000 retainer — $25,000 initially applied to prepetition services plus an additional $250,000. DSI's engagement contemplates a weekly chapter 11 fee run rate of approximately $20,000.
The debtor also filed an application to retain Stretto, Inc. as claims, noticing, and solicitation agent on February 27, 2026, and the court approved the retention in a final order entered April 1, 2026. The United States Trustee appointed Carol Lynn Fox of GlassRatner as the subchapter V trustee on February 26, 2026. Judge Kimball set the subchapter V status conference for April 15, 2026, and the nongovernmental claims bar date for May 6, 2026.
Early appearances. WilmerHale entered a notice of appearance for The Walt Disney Company and its affiliates on March 2, 2026. On March 4, Kelley Drye filed a notice of appearance on behalf of BPP East Union LLC, Crocker Downtown Development Associates, and Crocker Mizner Park IV, Ltd., identified as IPIC landlords. Federal Realty OP LP filed a notice of appearance on March 20, 2026, and the Town of Fairview filed a notice of appearance on March 12, 2026, reflecting creditor interest from one of the debtor's Texas theater communities.
Subchapter V Liquidation Plan and Creditor Recoveries
The debtor filed its subchapter V plan of liquidation on May 26, 2026, providing for distribution of net proceeds from the Cinemex, Blue Fox, and other asset sales. Class 1 non-tax priority claims are unimpaired; the plan provides that each holder receives deferred cash payments equal to the allowed claim amount if the class has accepted the plan, or cash on the effective date if it has not. Class 2 general unsecured claims are impaired and share pro rata in net liquidation proceeds remaining after administrative expenses, priority tax claims, and Class 1 are satisfied; the plan does not project a specific recovery percentage for that class. Class 3 equity interests, held by RSA, are impaired and entitled to vote on the plan; any funds or property remaining after allowed claims are paid in full would be distributed to Class 3. The plan seeks consensual confirmation under section 1191(a), reserving the debtor's right to pursue cramdown confirmation under section 1191(b) if a class votes to reject.
Current status. A confirmation hearing was scheduled for July 29, 2026; no confirmation order has been entered as of this writing. Burr & Forman filed a first interim fee application requesting $719,923.00 in fees and $17,460.31 in expenses, with a post-retainer balance of $393,775.36, and Development Specialists filed its own first interim application requesting $381,843.00 for 784.80 hours, both on July 2, 2026. The debtor also filed a third omnibus objection on July 16, 2026, challenging 24 claims — including those of AIG, Airgas, Con Edison, and PSE&G — as unsupported by the debtor's own books and financial records.
Key Timeline
Date
Event
August 5, 2019
Predecessor iPic filed chapter 11 in Delaware
October 17, 2019
RSA affiliate won auction with $51.8 million credit bid
November 15, 2019
2019 sale closed; founder Hamid Hashemi resigned
March 2020
COVID-19 pandemic shut down theaters; operations disrupted 12-15 months
February 25, 2026
Subchapter V petition filed (S.D. Fla.); WARN notices issued to all ~1,300 employees
February 26, 2026
Carol Lynn Fox appointed subchapter V trustee; status conference and bar date set
February 27, 2026
Application to retain Stretto as claims agent filed; California WARN notices filed
March 2, 2026
Interim cash management, customer program, tax, utilities, critical vendor, and insurance orders entered; Disney appeared through WilmerHale
March 4, 2026
Interim wages order entered; commercial card emergency motion filed; landlord group appeared through Kelley Drye
IPIC Theaters filed chapter 11 under subchapter V on February 25, 2026, in the U.S. Bankruptcy Court for the Southern District of Florida. The company has stated that the case is intended to facilitate an orderly liquidation of assets rather than a traditional reorganization.
Who owns IPIC Theaters?
The Retirement Systems of Alabama owns 100% of the debtor's equity interests. Specifically, the Employees Retirement System of Alabama and the Teachers Retirement System of Alabama hold the ownership stake, having acquired the predecessor's assets through a $51.8 million credit bid in a 2019 Delaware bankruptcy case.
Which IPIC locations are closing?
Outcomes diverged from IPIC's original WARN notices as the case progressed. The Redmond, Washington location closed via lease rejection on its originally noticed date of April 28, 2026. The Pasadena, California location closed June 3, 2026. Rather than closing, the Westwood, California location and a New York City lease were sold to Blue Fox Theater, LLC for $250,000 in a sale authorized June 5, 2026, and the Fort Lee, New Jersey theater was not closed — it was included in a May 13, 2026 sale to Cinemex Holdings USA, which said it would continue operating acquired locations, including Fort Lee, under the IPIC brand. The disposition of the North Bethesda, Midtown Atlanta, Delray Beach, Boca Raton, and North Miami Beach locations was not separately confirmed as of this writing.
Does IPIC have significant secured debt?
No. IPIC entered bankruptcy with near-zero funded secured debt. The only identified secured positions are a Konica Minolta Premier Finance UCC-1 filing relating to leased equipment and AFCO Direct's premium-finance collateral rights on insurance premiums. The $113.9 million in total liabilities is dominated by approximately $102.4 million in operating lease right-of-use obligations.
Has IPIC filed for bankruptcy before?
Yes. The iPic brand previously filed chapter 11 in Delaware on August 5, 2019, citing increased competition and elevated construction costs. RSA had provided a $204 million credit facility before the 2019 filing and acquired the assets through a $51.8 million credit bid. The 2026 First Day Declaration attributes the second filing to post-pandemic attendance declines, reduced theatrical releases, and rising operating costs.
Who are IPIC's professional advisors?
The debtor retained Burr & Forman LLP as bankruptcy counsel (with a $550,000 prepetition retainer) and Development Specialists, Inc. as financial advisor (with a $275,000 retainer). Carol Lynn Fox of GlassRatner was appointed as the subchapter V trustee. Stretto, Inc. has been proposed as claims and noticing agent.
Who is the claims agent for IPIC Theaters?
Stretto, Inc. is the claims, noticing, and solicitation agent. The court approved the retention in a final order entered April 1, 2026.
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