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The parent company of the General Cinema theater chain filed for a bankruptcy reorganization, and two top executives resigned Wednesday as the chain struggles to compete with a host of new "megaplex" cinemas.
GC Companies Inc. will liquidate its holdings in Florida, Georgia, Louisiana and Tennessee, and refocus on the Northeast and Midwest, it said in a statement.
It plans to close 17 theaters with 108 screens this month.
The announcement comes a month after the Newton-based company warned it was considering filing for bankruptcy after a $10.1 million third-quarter loss.
The company blamed its problems on a market oversaturated by the recent construction of multi-screen "megaplex" cinemas.
"This has resulted in a downturn in the theater industry due to the decline in attendance at older theaters in favor of state of the art megaplexes," the company said.
GC Companies said it will terminate unprofitable leases and cut expenses while continuing to operate during restructuring. It is attempting to secure $45 million in financing to fund operations.
GC Companies said it will report total assets of $328.9 million and total liabilities of $195.1 million, as of Aug. 31.
Also Wednesday, chief executive officer Richard Smith and president and chief operating officer Robert Smith resigned.
The company said both stepped down to avoid a conflict of interest. Both hold positions with Harcourt General Inc., which has guaranteed some of the company's leases. G. Gail Edwards, current chief financial officer, will take over as president and chief operating officer.
The chain's problems reflect an industry trend.
United Artists Theater Co., Edwards Cinemas and Carmike Cinemas have all filed for bankruptcy this year. In August, Loews Cineplex Entertainment Corp. reported dropping revenues and warned it might default on its debt.
GC Companies stock fell 94 cents to $1.94 in afternoon trading on the New York Stock Exchange.
