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Cineworld Removes Nanuet Regal From List Of Proposed Closures; Movie Giant Retains Right To Seek Exit Pending Negotiations With Simon Property Group
By Tina Traster
It’s like a movie with a good plot twist — for now.
Regal Cinema at The Shops at Nanuet may not be dropping the curtain if it can negotiate successfully with its landlord, Simon Property Group, to modify its lease.
Last month, Cineworld Group PLC, Regal’s parent company, asked a bankruptcy court judge for permission to reject 20 existing leases, including the Nanuet Stadium 12. Cineworld filed for bankruptcy in the Southern District of Texas in Houston earlier this year.
But this week, Cineworld returned to the court, asking United States Bankruptcy Judge Marvin Isgur, to remove 15 of the 20 proposed terminations, which included Nanuet’s Regal, while reserving the right to return to the court if it cannot negotiate new terms with the landlord.
The court filing says, the “debtors reserve all rights to seek entry of one or more supplemental orders authorizing the rejection of such leases at a later date.”
In the Chapter 11 bankruptcy reorganization, the movie chain asked the court to allow it to terminate leases on theaters it deemed unprofitable. The court order would permit Cineworld to exit leases on properties with no further obligation to the landlords.
For now, cinephiles and others who are concerned with the economic well-being of the Shops at Nanuet and the Route 59 corridor, can cross their fingers and hope that negotiations will keep the lights on in the 12-plex.
The closure of the Regal Cinema would mark the second loss of a movie theater: the Bow-Tie Theater in New City also recently closed.
The list of proposed rejected leases had included Regal Cinemas in Turnersville, NJ, Hyannis, MA, and on West 42 Street in New York City’s Time Square known as the E-Walk Stadium 13. The balance of the theaters area spread around the nation. The northeastern locations have been given a reprieve.
The five cinemas remaining on the list are located in California, Georgia, Colorado, Florida, and North Carolina. Two of the five, in Colorado and North Carolina are Regal Cinemas. The cinemas in Florida and Colorado are leased by Simon Property Group.
Headquartered in the UK, the publicly traded company is the second-largest cinema chain operating under five major brands in more than 750 locations in ten countries.
As of the initial bankruptcy filing, the theater chain represented that its businesses have been severely impacted by the coronavirus pandemic, including a decline in cinema attendance and a rise in online streaming.
The chain, which has hundreds of leases for nearly 10,000 screens, had taken critical steps since COVID to ease its financial burden caused by underperforming theaters, many of which are subject to off-market lease terms that no longer reflect the value of real estate in the economy.
Over the past two and a half years, according to Cineworld, the company has attempted “extensive good-faith and arm’s-length negotiations with their landlords, reached agreement on various lease restructurings that provided among other things, the deferral of rent, in some cases.”
While such actions have provided breathing room, the industry has not been able to rebound from the pandemic and the relief on some leases did not deliver a long-term solution to the company’s financial problems, according to the bankruptcy filings.
In recent months, the Shops at Nanuet has shown positive signs of emerging from the pandemic.