iPic Entertainment files for Chapter 11 bankruptcy, to pursue sale

Luxury theater chain iPic has filed for Chapter 11 bankruptcy.

The company, helmed by Hamid Hashemi, a former executive of big box mega theaters, said delays in development and the high cost of capital depleted iPic’s resources.

Shares of the company fell nearly 60% on the news Monday morning before the opening bell, trading around 68 cents. At the close on Friday, shares last traded at $1.67.

“Importantly, delays related to the Delray Beach [Florida] location, resulted in unforeseen costs and a significant slowdown in circuit-wide development and new grand openings,” Hashemi said. “The decision to commence a Chapter 11 case to pursue a comprehensive restructuring was not taken lightly but is necessary to accomplish our long-term goals and secure the company’s future.”

The company hopes to restructure its debt and strengthen its balance sheet, but will also pursue a sale.

IPic said its theaters will remain open during the transition and its employees, vendors and suppliers are still being paid.

“The financial restructuring will allow the company to further improve and enhance its theaters and dining experiences, continue to provide an unparalleled guest experience that is evidenced by the over 2 million iPic Access loyalty members, and continue with its expansion plans,” Hashemi said.

Last week, the company warned investors that it could file for bankruptcy after it missed a $10.1 million interest payment to the Employees Retirement System of Alabama and the Teachers Retirement System of Alabama. At the time, iPic said it had $2.2 million in cash-on-hand.

This is a breaking news story. Please check back for updates.