AMC Theater Sued For Not Paying Rent, Chain May Not Reopen Until November

AMC Theatres has been sued in Florida for failing to pay its April rent—something the chain made clear to landlords it wouldn’t be doing with its theaters closed due to the coronavirus outbreak. This particular landlord would seem to disagree.

The contentious AMC location is located in a shopping mall in Hialeah, FL, whose owners also serve as the theater’s landlord. Although AMC informed all of its landlords that it would stop rent payment, the Florida folks weren’t about to simply accept that proclamation. They filed suit in federal court in Miami on Wednesday, alleging that AMC failed to pay the $52,153.87 it owes in April rent on the AMC Hialeah 12. One might think “Okay, a company like AMC won’t care about being made to pay $52,000,” but this is where things get interesting. According to the suit, failure to make a payment “triggers a requirement for immediate payment of the balance of the lease.” And considering the fact that the lease apparently goes for another 12 years, that amounts to a suit that is seeking not $52,000, but $7.5 million.

“The Landlord recognizes the challenges posed by COVID-19, including on its own business,” states the suit. “Under the express terms and provisions of the Lease and Guaranty, however, Defendant is obligated to pay Rent and that obligation is not excused.”

The landlord also claims that the pandemic does not activate the “force majeure” clause built into the lease, although if it doesn’t, one has to wonder what kind of catastrophic event actually WOULD apply.

Hidden in the text of Variety’s writeup, though, is something especially sobering: According to that publication, AMC recently announced a $500 million bond that would supplement its finances, “and said the offering would help it stay solvent through a potential reopening in November.”

Excuse us, but November? That would be news to us, if AMC is really envisioning the theaters in their chain not reopening until that point. Speculation has tended to suggest theaters would be reopening much sooner, especially considering that tentpole films like Christopher Nolan’s Tenet or Disney’s Mulan are still on the release schedule for July. Georgia, in fact, is attempting to reopen its theaters this week, despite the fact that they are in no way prepared to do so. Would AMC really allow major competitors like Regal and Cinemark to reopen their theaters months before they followed suit? And would they really follow through on reported practices like taking the temperatures of customers, as has apparently been discussed?

Regardless of when they decide to reopen, one thing is clear: Those landlords are going to want their rent, and this probably isn’t the last lawsuit AMC Theatres will see over it.