Metropolitan Theatres: Subchapter V Reorganization
Metropolitan Theatres: Century-Old Cinema Chain Restructures Through Subchapter V
ElevenFlo Research
March 10, 202615 min readUpdated June 9, 2026
Metropolitan Theatres Corporation, a four-generation, privately held cinema chain founded by the Corwin family in 1923, filed a Subchapter V chapter 11 petition on February 29, 2024, in the U.S. Bankruptcy Court for the Central District of California. At the time of filing, the company operated 16 theatres and 87 screens across California, Colorado, and Utah, making it Los Angeles's oldest movie theater chain. The First Day Declaration said the filing followed pressure from above-market lease obligations, the lingering effects of the COVID-19 pandemic, and the 2023 Hollywood writers' and actors' strikes, which reduced the film release pipeline.
The First Day Declaration identified lease restructuring as the primary objective, with the company seeking to use Subchapter V to renegotiate or reject above-market leases while preserving its operating theatres. After four plan iterations spanning nine months, the court confirmed the plan on March 21, 2025, with Class 4 general unsecured creditors voting 97.7% in favor by dollar amount. The plan became , and the Corwin family retained equity ownership of Reorganized MTC.
Metropolitan Theatres has been owned and operated by the Corwin family since Joseph H. Corwin opened the Broadway theatre in downtown Los Angeles in 1923. Bruce C. Corwin led the company as chairman and CEO for approximately 40 years until his death on November 4, 2021 at age 81; his son David Corwin, president since 1999, then assumed leadership and became the debtor's post-petition lender during the case.
At filing, Metropolitan operated 16 theatres and 87 screens, including two IMAX auditoriums, across California, Colorado, and Utah. The workforce consisted of 12 full-time and 240 part-time employees, with a weekly payroll of approximately $120,000. Santa Barbara County was its largest market, followed by the Los Angeles area, the Denver metropolitan area, and Park City, Utah.
The company's Santa Barbara flagship, the Arlington Theatre, is owned separately by the Corwin family and leased to Metropolitan through a family entity, placing it outside the estate; David Corwin stated it would "not be impacted" by the filing. In 2003 the company added western ski-resort locations in Loveland and Steamboat Springs, Colorado, and Park City, Utah, where its Redstone 8 and Holiday Village 4 cinemas served as Sundance Film Festival venues. It had already closed underperforming theatres in Aspen, Colorado, and Hailey, Idaho, in 2022.
Pandemic, Strikes, and Above-Market Leases
COVID-19 pandemic. The First Day Declaration described the COVID-19 pandemic as the primary catalyst for the company's financial difficulties. All theatres were temporarily closed in March 2020, and Metropolitan implemented layoffs, furloughs, and salary reductions. While all locations had reopened by December 31, 2021, the industry continued to face reduced film content, evolving theatrical release windows, and increased streaming competition. CEO David Corwin stated that the company's 2023 performance was "20 percent better than 2022, but still 20 percent less than we did in 2019."
Government relief. To maintain operations during the pandemic, Metropolitan received $9 million in Shuttered Venue Operator Grants, $2.5 million in PPP loans (fully forgiven in 2022), and a $500,000 SBA Economic Injury Disaster Loan that remained outstanding at the time of filing. The company's non-debtor affiliate ATP also provided $2,010,000 in loans during 2023.
2023 Hollywood strikes. The Writers Guild of America strike (May through November 2023) and the SAG-AFTRA strike further reduced the film release pipeline. The First Day Declaration projected an 11% drop in domestic box office revenue for 2024, placing it 30% below the 2017-2019 average. The company reported a net loss exceeding $3 million from January through September 2023.
Above-market leases and industry headwinds. Annual rent obligations totaled approximately $2.6 million, with many leases described as above-market. Theatrical release windows had compressed from 90 days to, in some cases, simultaneous digital and in-person release dates. The broader cinema industry had already seen permanent closures from Pacific Theatres and ArcLight Cinemas in 2021 and a chapter 11 filing by Cineworld/Regal Cinemas in 2022. Metropolitan's filing continued a pattern of cinema operator restructurings driven by the combined effects of pandemic-era closures, labor disputes, and the acceleration of streaming distribution.
At the time of filing, Metropolitan listed approximately $26.5 million in assets and liabilities and total debts of $7.3 million, including $5.2 million in a secured guaranty with American Riviera Bank and $2.1 million owed to affiliate ATP. Outstanding rent obligations to landlords totaled approximately $313,882. The company was not in default on its loans at the time of filing, and maintained five bank accounts with combined balances of $282,391.
David Corwin described the filing as "a speedbump" that would enable the company to restructure debt and renegotiate leases. Santa Barbara locations were of particular concern: the city's closure of State Street to vehicles had been cited as an additional factor affecting foot traffic, and the company's seven Santa Barbara locations represented its largest market concentration. Annual projections were running 10-15% below previous years at the time of filing.
First Day Motions and Cash Management
On the petition date, Metropolitan filed a series of emergency motions addressing immediate operational needs. The company sought authority to maintain its existing bank accounts and cash management system under sections 105(a), 345, and 363 of the Bankruptcy Code. The U.S. Trustee filed an opposition raising concerns about the terms, but the court entered an interim order on March 13, 2024, followed by a final order on April 29, 2024.
Utility adequate assurance. Metropolitan's utility motion disclosed approximately $59,688 in monthly utility expenses across seven providers. The debtor proposed a $30,000 cash deposit in a dedicated City National Bank account, covering approximately two weeks of utility services. Utility providers received 21 days to submit additional assurance requests. The court entered the final utility order on April 29, 2024.
Employee wages and critical vendors. The court approved a final order authorizing prepetition wage payments on March 13, 2024, covering the company's weekly payroll of approximately $120,000. Metropolitan also filed motions to honor gift card obligations ($630,056 outstanding) and to pay critical film vendor claims, both of which the U.S. Trustee initially objected to before interim and final orders were entered.
Metropolitan did not obtain traditional DIP financing. Instead, CEO David Corwin personally provided $1 million in post-petition financing across two tranches under section 364(b) of the Bankruptcy Code.
First DIP loan. On May 21, 2024, Metropolitan filed a motion for $500,000 in post-petition financing from David Corwin at 6% interest (8% default rate). The loan carried a junior security interest in prepetition assets and liens on post-petition assets, with guarantees from related entities. Upon the plan effective date, the loan would convert to a four-year term loan. Both Camino Real LLC (a landlord) and the U.S. Trustee objected to the insider financing terms, but the court approved the loan on June 13, 2024.
Second DIP loan. By fall 2024, Metropolitan's revenue had declined further. The emergency motion for additional financing filed November 1, 2024, cited a 20% year-over-year decline in domestic movie theatre admission revenue and disclosed that the first DIP loan had been fully drawn. The court approved the additional $500,000 on November 5, 2024. This second loan would convert to a subordinate term loan upon the effective date, with no payments required until after final plan payments were completed.
Exit financing. A $2.5 million loan was arranged between Metro Four Theatre Property, LLC (a Metropolitan subsidiary) and Santa Barbara Commercial Mortgage to fund plan distributions on the effective date. David Corwin filed a status declaration on March 11, 2025, confirming that the lender had approved the loan and all contingencies were satisfied, with a supplemental declaration on March 14 reporting that loan documents were being executed. The exit financing closed in mid-March 2025, enabling the effective date distributions.
Lease Assumptions, Rejections, and Landlord Objections
Lease restructuring was the central objective of Metropolitan's chapter 11 case. The company assumed key operating leases while rejecting underperforming locations.
Lease assumptions and cure amounts. Under the confirmed plan, Metropolitan assumed leases with cure payments of $848,391 to Lightwell Management for the corporate offices, $369,751 to Sphear Investments for the Paseo Nuevo Theatre, and $83,578 to Camino Real LLC. The company also assumed motion picture exhibition licenses with major studios including Sony, Universal, Warner Bros., and Disney.
Lease rejections. Metropolitan rejected the Cookie Plug lease effective September 30, 2024, and the 805 University lease by stipulation. Additional leases were rejected per the plan supplement. Post-emergence, the company website lists 11 theatres and 62 screens in California and Colorado, down from 16 theatres and 87 screens at filing -- a reduction reflecting lease rejections and the shedding of Utah locations.
Landlord objections. The most significant contested matters involved landlord claims. The City of Santa Barbara objected to proposed cure amounts but withdrew its objection two days later. Camino Real LLC filed a limited objection to the plan. LightWell Real Estate Partners objected on the basis that the plan did not adequately provide for $174,689 in unpaid postpetition rent, arguing that section 1191(e) cannot be used to pay administrative rent obligations under section 365(d)(3) in installments. In the second round of objections following supplemental filings, Fairview Shopping Center LLC and Aegon USA Realty Advisors LLC also filed objections. All objections were resolved consensually or overruled ahead of confirmation.
Disney exhibition agreements. The confirmation order contained provisions addressing Disney exhibition agreements: Disney's audit rights and pre-effective-date liability for audit amounts were preserved, and the debtor waived all avoidance actions and other causes of action against Disney arising on or before the effective date.
Subchapter V Plan and Independent Bank Settlement
Plan evolution. Metropolitan's Subchapter V plan went through four iterations between May 2024 and February 2025 before confirmation. The original plan was filed on May 28, 2024. The First Amended Plan followed on August 20, 2024, with a confirmation hearing initially scheduled for October 1, 2024. A modified plan was filed September 24, 2024, and after further negotiations with landlords and creditors, the Second Modified Plan -- the version ultimately confirmed -- was filed on February 11, 2025.
Independent Bank settlement. Independent Bank held the largest non-insider general unsecured claim at approximately $1.95 million and initially voted to reject the plan. The debtor negotiated a settlement requiring insiders to divert the first $142,857 of their general unsecured claim distributions to non-insider creditors. Following this concession, Independent Bank changed its vote to accept, enabling Class 4 to approve the plan by 91.7% by number and 97.7% by dollar amount.
Treatment by class. The confirmed plan treated claims as follows:
Class 1(a)
SBA Secured Claim ($496,704)
Reinstated (unimpaired)
Class 1(b)
American Riviera Bank ($5,200,000 guaranty)
Reinstated (unimpaired)
Class 2
Cure Claims (landlords/executory contracts)
Paid in full (unimpaired)
Class 3(a)
Gift Card Claims ($630,056)
Rights reinstated (unimpaired)
Class 3(b)
Priority Unsecured Claims
Paid in full (unimpaired)
Class 4
General Unsecured Claims ($7.5M-$10.2M)
$775,000 over 3 years (impaired)
Class 5
Intercompany Claims
Redeemed or cancelled
Class 6
Equity Interests
Retained by Corwin family
Plan Treatment by Class
Non-insider general unsecured creditors were projected to receive approximately 15.5% recovery, while insider creditors would receive approximately 7.3% due to the subordination provision from the Independent Bank settlement. The plan was confirmed as consensual under section 1191(a), which meant the absolute priority rule did not apply -- allowing the Corwin family to retain equity despite impaired unsecured creditors voting to accept.
Plan funding. Effective date distributions were funded by cash on hand (including DIP loan proceeds), the $2.5 million exit financing from Santa Barbara Commercial Mortgage, projected disposable income over three years, and affiliate distributions. The two DIP loans from David Corwin converted on the effective date: the first into a four-year term loan and the second into a subordinate term loan with no payments required until after final plan payments.
Emergence. The plan became effective on April 1, 2025, and a notice of substantial consummation was filed the same day. Post-confirmation governance was placed under a three-member board of directors -- Toni Corwin, David Corwin, and Daniel Corwin -- with David Corwin continuing as CEO and Phillip Hermann as CFO.
Professional Retentions and Fee Awards
Metropolitan retained Loeb & Loeb LLP (Lance N. Jurich, Vadim J. Rubinstein, Guy Macarol) as debtor's counsel, B. Riley Advisory Services (Seth R. Freeman, Bernadette Lombardo) as financial advisor, and A&G Realty Partners as real estate consultant. Donlin Recano & Company served as claims and noticing agent. Rose Snyder & Jacobs, LLP handled accounting, Reicker Pfau, Pyle & McRoy LLP served as special counsel, and Brownstein Hyatt Farber Schreck, LLP provided additional legal services -- all approved as ordinary course professionals.
Fee awards. The court awarded the following fees in the first interim period (February 29 through October 31, 2024):
Loeb & Loeb LLP
Debtor's Counsel
$771,187
B. Riley Advisory
Financial Advisor
$156,845
M.D. Flahaut
Subchapter V Trustee
$33,660
Rose Snyder & Jacobs
Accountant
$27,650
Reicker Pfau
Special Counsel
$3,968
Total
$993,310
First Interim Fee Awards
In final fee applications filed in May 2025, Loeb & Loeb sought $958,029 in total fees, B. Riley filed its final application, and the Subchapter V Trustee requested $39,712. A&G Realty requested $38,787, Brownstein Hyatt sought $13,197, Rose Snyder & Jacobs sought $33,950, and Reicker Pfau requested $5,118. All final fee hearings were set for June 3, 2025. The plan reserved $50,000 for professional fee claims, with total professional fees estimated at $1,271,415.
Frequently Asked Questions
When did Metropolitan Theatres file for bankruptcy?
Metropolitan Theatres Corporation filed a Subchapter V chapter 11 petition on February 29, 2024, in the U.S. Bankruptcy Court for the Central District of California. The case was assigned to Judge Barry Russell. The plan was confirmed on March 21, 2025, and became effective on April 1, 2025.
Why did Metropolitan Theatres file for bankruptcy?
The First Day Declaration attributed the filing to the financial impact of the COVID-19 pandemic (which forced temporary closure of all theatres in 2020), the 2023 writers' and actors' strikes that reduced the film release pipeline, compressed theatrical release windows due to streaming competition, and above-market lease obligations. CEO David Corwin stated the company's 2023 revenue remained 20% below 2019 levels.
What happened to the Arlington Theatre?
The Arlington Theatre in Santa Barbara was not affected by the bankruptcy. The building is owned separately by the Corwin family and leased to Metropolitan Theatres through a family entity. David Corwin stated: "The Arlington is a treasure for us, not just the community."
What is Subchapter V bankruptcy?
Subchapter V is an expedited form of chapter 11 designed for small business debtors. It eliminates the requirement for a disclosure statement, provides for a Subchapter V trustee to facilitate plan negotiations, and permits the debtor to retain equity even over creditor objections if the plan meets certain requirements. Metropolitan's plan was confirmed as consensual under section 1191(a).
How much will unsecured creditors receive?
The confirmed plan provides a total distribution of $775,000 to general unsecured creditors over three years. Non-insider creditors are projected to receive approximately 15.5% recovery, while insider creditors would receive approximately 7.3% due to a subordination provision from the Independent Bank settlement.
Did the Corwin family retain ownership?
Yes. Under the confirmed plan, existing equity holders retained their interests. Post-confirmation, the board of directors consists of Toni Corwin, David Corwin, and Daniel Corwin, with David Corwin continuing as CEO.
What theatres were closed during the bankruptcy?
Metropolitan rejected leases for multiple locations during the case. Post-emergence, the company website lists 11 theatres and 62 screens in California and Colorado, compared to 16 theatres and 87 screens at the time of filing. The Utah locations (Redstone 8 and Holiday Village 4 in Park City) and certain other properties were shed through lease rejections.
How was the restructuring funded?
Plan distributions were funded by cash on hand, two insider DIP loans totaling $1 million from CEO David Corwin (at 6% interest), exit financing of $2.5 million from Santa Barbara Commercial Mortgage through a Metropolitan subsidiary, projected disposable income over three years, and affiliate distributions.
Who is the claims agent for Metropolitan Theatres Corporation?
Donlin Recano & Company serves as the claims and noticing agent. The court-authorized role in this case anchors creditor notices and claims-register administration to the filed retention and noticing record.
This article was researched and written with AI assistance, using court filings, public records, and news sources. AI-generated content can contain errors. Verify all information against primary sources before relying on it. This is not legal or financial advice. Read our full disclaimer.
