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National CineMedia Inc., the largest movie-theater advertising business in North America, is negotiating to hand control to senior lenders as part of a planned bankruptcy filing, WSJ Pro Bankruptcy reported. The company, which owes roughly $1.1 billion in debt, is in an extended grace period after missing interest payments owed to its bondholders last month. It has hired law firm Latham & Watkins LLP as restructuring counsel, while its operating subsidiary National CineMedia LLC recently tapped lawyers from Paul Weiss Rifkind Wharton & Garrison LLP, according to people familiar with the matter. FTI Consulting Inc. is serving as restructuring adviser, while Lazard Ltd is the company’s investment banker, these people said. Negotiations with creditors have focused on reaching a prearranged restructuring deal that could be implemented through chapter 11, the people familiar with the matter said. The company is expected to continue operating as usual.

Some hotel owners that rode out the coronavirus pandemic are finding the recent travel rebound might not be enough to persuade lenders to extend new credit when their debts mature in the coming months or years, WSJ Pro Bankruptcy reported. Leisure travel has rebounded since the second half of last year, but the recovery has been much weaker for facilities with large meeting rooms that rely on business trips and conferences, partly because many meetings are now held remotely. Even as business-focused hotels can attract some vacationers, the numbers aren’t high enough to make up for the slow recovery in business travelers. Persistently low occupancy rates for business-focused hotels have driven down their property values. As a result, lenders are asking hotel owners to put up more capital before agreeing to refinance their loans — but cash-strapped borrowers saddled with lots of debt might not be able to meet the requirements. As many as 10 hotel owners in the U.S. filed for bankruptcy this January, compared with just two in January 2022, according to New Generation Research Inc., a data provider on corporate bankruptcies. Recent bankruptcies included two large hotels in Manhattan, a Holiday Inn in the Financial District and a Crowne Plaza in Times Square. Still, a bigger surge in hotel bankruptcy filings is unlikely because of factors including high costs associated with the process, said David Neff, a lawyer specializing in hotel bankruptcy at Perkins Coie LLP. “If things go south, many of them will just hand the keys back [to the lenders],” Mr. Neff said.

Shares of Cineworld slumped as much as 22% on Wednesday after media reports said the world's second-largest cinema operator had received 40 non-binding bids, but none for its UK and U.S. assets or nearing its $6 billion secured debt load, Reuters reported. The reports cited company counsel Joshua Sussberg's comments to the U.S. Bankruptcy Court in Houston on Tuesday, where he also said the initial bids received by a Feb. 16 deadline were all for the rest of Cineworld's global assets, mainly for theatres in central Europe, eastern Europe and Israel. In January, the company said that it would focus on a sale of the group as a whole rather than individual assets, months after the British cinema operator filed for U.S. bankruptcy protection in its bid to restructure debt and strengthen its balance sheet. The reports also said the company was proposing an April 10 deadline for final bids, with an auction, if necessary, to follow on April 17. A vote on restructuring has been set for May 21, with a court confirmation hearing tentatively set for May 30.

Aruze Gaming, the slot machine developer behind Shoot to Win Craps, Go Go Claw and other slot and electronic table games, filed for chapter 11 protection, one day after announcing the departure of its U.S. branch president, the Las Vegas Review-Journal reported. Aruze filed a voluntary petition in the U.S. Bankruptcy Court for Nevada on Wednesday. The company said in a news release that the filing was part of its efforts to restructure financially because of “a recent garnishment judgment against Aruze resulting from a separate judgment against Aruze’s shareholder.” The company said that it intends to continue operating normally. “This filing was a critical business strategy we were forced to make due to external factors outside our control. We fully understand the implications associated with this action, but we believe this is the best way for Aruze to maintain the overall health of our business,” Global CEO Yugo Kinoshita said in a statement. “This restructuring has no reflection on the health of Aruze. We’re proud of the advances we have made to establish Aruze as a casino mainstay. We are highly confident this action will protect our brand, our legacy and our suite of games. As we progress through this process, we are assured that Aruze will emerge as an even stronger company.” On Tuesday, the company announced the departure of Robert Ziems, president of Aruze Gaming America. It said Kinoshita would take on the day-to-day operations, beginning March 1, while the company’s board searches for a replacement.

America’s largest owner of local sports channels is heading toward a complex $8.6 billion debt restructuring in bankruptcy court as it stakes its future on a new direct-to-consumer streaming service, Bloomberg News reported. After leveraging up to buy regional sports networks from Walt Disney Co. in 2019, Diamond Sports Group LLC is suffering from a decline in cable-TV subscribers, spurring negotiations with creditors and major sports leagues about its viability as a going concern. The outcome will have serious implications for the $55 billion world of sports-media rights: the company’s channels showcase Major League Baseball, National Basketball Association and National Hockey League games to fans from Detroit and Phoenix to San Diego. With financial troubles mounting, the Sinclair Broadcast Group Inc.-owned firm will likely skip $140 million in interest payments due mid-February, kickstarting a 30-day grace period, according to people familiar with the matter. A stark divide is emerging between would-be winners and losers: its $630 million first-lien loan is trading at 92 cents on the dollar, while nearly $5 billion of lower-ranked bonds change hands for under 10 cents — signaling a near-total wipeout for subordinated creditors. The restructuring plan favored by many creditors and the company itself would see the largest lenders becoming owners, turning much of its debt into equity through a pre-arranged chapter 11 process, according to people with knowledge of the matter, who declined to be identified citing the private nature of the talks.

Developer AD1 Global Hotels LLC put eight Florida properties using Marriott, Hilton, Hyatt and IHG brands under bankruptcy protection, blaming rising interest rates, Hurricane Nicole and allegedly unreasonable demands by lender HPS Investment Partners LLC, WSJ Pro Bankruptcy reported. The Hollywood, Fla.-based parent company of the hotels isn’t part of the bankruptcy. It plans to seek an equity investor for the properties, and potentially refinance their debt and sell assets. The bankruptcy filing covers eight newly constructed or renovated properties that owe $165 million to HPS Investment Partners, according to a filing Wednesday in the U.S. Bankruptcy Court in Wilmington, Del. AD1’s chief operating officer, Alex Fridzon, said in a declaration in bankruptcy court the portfolio of properties has been valued at $210.5 million to $262 million. AD1’s portfolio has more than 25 properties. Roughly a third, with a total of more than 1,200 rooms, are part of the bankruptcy case.

The meme-stock phenomenon is on its last legs, and no company is feeling the comedown more than movie-theater chain AMC Entertainment Holdings Inc., WSJ Pro Bankruptcy reported. AMC deftly surfed the meme-stock wave to raise billions of dollars and help it avoid bankruptcy during the pandemic, but its shares have sunk back to roughly where they were trading before the company caught fire in the online trading community. Box-office receipts are falling short, and the meme-stock premium that helped AMC raise fresh capital has all but evaporated. The Leawood, Kan.-based company’s market capitalization is now about $5 billion, down from more than $31 billion at its 2021 peak. Institutional investors are indicating that a debt default is probable, pricing AMC’s senior debt at less than 65 cents on the dollar. With cash having dwindled over the past year, AMC will soon ask its investors to approve a transaction that could help it defy the odds once again. The proposed deal involves the conversion of preferred equity units into common shares, a reverse stock-split, and a possible increase in the amount of new shares AMC can sell. The transaction would likely result in diluting shareholders’ stakes, but could also give the company another way to raise capital as the movie-theater industry struggles to return to prepandemic attendance levels. Shareholders are expected to vote on the proposal in mid-March.

Regal Cinemas, the second-largest chain of movie theaters in the U.S., will close 39 locations after its parent company Cineworld filed for bankruptcy in September, according to legal filings obtained by Variety. Cineworld will reject the leases beginning Feb. 15. Amid a massive decline in the domestic box office during the COVID-19 pandemic, the monthly rent per theater increased by nearly 30% from 2019 to 2022, according to the latest bankruptcy filing. “In total, the Debtors estimate that rejecting the Leases will save their estates approximately $22 million annually,” the document states. Any personal property of little value remaining at the locations will be abandoned. Cineworld operates 747 locations with 9,139 screens in 10 countries, with roughly 500 of those theaters in the U.S. Theatrical moviegoing has taken a huge hit during the pandemic, with the 2022 domestic box office tapping out at $7.5 billion, an approximate 30% decrease from the $11.4 billion in 2019 pre-COVID. The company took a loss of $3 billion in 2020, as many theaters remained shuttered, and a $708.3 million loss before tax in 2021. The net debt, excluding lease liabilities, was $4.84 billion.