Carmike Theater Chain Files for Chapter 11

Carmike Cinemas Inc., the struggling No. 3 U.S. movie theater chain, filed for Bankruptcy Court protection from creditors less than a week after failing to make $9 million in interest payments to bondholders.

The Columbus, Ga.-based chain listed $841.1 million in assets and $652.8 million in debts in its Chapter 11 petition Tuesday in U.S. Bankruptcy Court in Wilmington, Del.

There has been a wave of bankruptcy filings by smaller theater chains hit by competition from the Internet and mega-plex movie houses. In May, art film theater chain Silver Cinemas filed for Chapter 11 in Delaware.

Carmike officials decided a bankruptcy filing was the best way to “achieve a successful restructuring of our business,” said Michael W. Patrick, the company’s president and chief executive.

Carmike officials said last week its senior lender, identified by an analyst as Wachovia Corp., blocked payment of $9 million in interest due Aug. 1 on senior subordinated notes. The company said it will try to renegotiate the terms of its loans.

With 436 theaters in 36 states, Carmike operates more facilities than any other chain in the U.S. It ranks No. 3 in the industry based on its total of 2,802 screens.

Among the company’s largest unsecured creditors are Bank of New York, trustee for holders of $209.3 million in bonds; Atlanta-based Wachovia Bank, owed $263 million in loans; and movie production company DreamWorks SKG, owed $5 million for film rental.

Carmike shares were unchanged at $1.94 on the New York Stock Exchange.