VIP Cinema Holdings Inc., which makes reclining seats for movie theaters, is shutting down for good after economic fallout from the coronavirus pandemic made a proposed restructuring impossible, WSJ Pro Bankruptcy reported. The St. Louis-based company told hundreds of employees it would close down, as efforts to combat the pandemic through social distancing have taken a brutal toll on the entertainment industry. The business had filed for chapter 11 in U.S. Bankruptcy Court in Wilmington, Del., in February but hoped to emerge with about $150 million less debt under a restructuring proposal backed by Oaktree Capital Management LP. What was supposed to be a speedy exit from bankruptcy began unraveling as many of VIP Cinema’s customers stopped showing movies to try to slow the spread of the pandemic. VIP Cinema’s biggest shareholder is private-equity firm H.I.G. Capital, which invested in the company in 2017 and would have retained a stake under the restructuring proposal. Backers of the prepackaged strategy had second thoughts as the Covid-19 pandemic spread.
