GC Theaters File for Bankruptcy; Imax Warns It Won’t Meet Forecasts

The movie theater “megaplex” building boom claimed more victims Wednesday when cinema operator GC Cos. said it filed for bankruptcy protection. And Imax Corp., the big screen cinema company, warned investors after the market closed that it will fall short of analysts estimates for the third quarter, reporting “a modest loss.”

The Chestnut Hill, Mass.-based parent company of General Cinema Theaters Inc. blamed over-saturation in the multiscreen megaplex market as the cause of its financial problems, as well as those of other troubled companies, including United Artists Theater Circuit Inc., Edwards Theaters Circuit Inc. and Carmike Cinemas Inc.

After the announcement, shares of GC Cos. plummeted $1.50, or 52%, to $1.38 at the close of trading on the New York Stock Exchange.

Harcourt General Inc. suffered collateral damage in the fallout, saying Wednesday it planned to take a $100-million charge from theater lease payments it guaranteed before spinning-off GC Companies in 1993. Harcourt shares closed down $2, or 3%, to $58.85 on Wednesday.

Toronto-based Imax, which closed down 94 cents at $14.50 on Nasdaq, blamed “the financial state of the commercial exhibition industry” for its loss. It also lowered expectations for the year’s earnings to 60 cents to 70 cents per share.