Edwards Could Close 6 Imax Sites


Edwards Theatres Circuit Inc. is moving to break contracts that could lead to closures of six Imax theaters, including three in Southern California.

Newport Beach-based Edwards, which is trying to reorganize its debts under Bankruptcy Court protection and has shed badly performing movie houses, and Imax Corp. said they have failed to negotiate a settlement on Imax's claims for $29 million owed in licensing fees under the contracts.

Both sides say they will seek Bankruptcy Court approval to scrap the lease contracts. Court approval, however, doesn't necessarily mean that the theaters will be closed. Edwards won court approval last August to get out of the lease at the Lido theater in Newport Beach but is still operating it.

The theaters that could be closed are in Irvine, Ontario, Valencia, Fresno, Houston and Boise, Idaho.

Under its plan, which is the subject of a court hearing Friday, Edwards would raise $56 million by selling a 51% stake to an investor group led by Denver financier Philip Anschutz.

But Edwards, the state's largest movie house operator, has hit bumps as it seeks creditor and court approval of its reorganization plan.

It contends that the debt claimed by Imax isn't legitimate and that the Imax theaters are not drawing enough customers. "At the end of the day, these things don't make any money," Edwards' President Steven Coffey said.

Edwards' lawyer, Eric Goldberg, said that if the court allows the company to break the contracts, Edwards will close the Imax theaters and probably convert them to conventional movie houses.

Imax, however, contends that some of the theaters are successful. The Irvine Spectrum Imax was once one of its highest performers, but the numbers have now "tailed off somewhat," said Richard L. Gelfond, Imax's co-chairman and co-chief executive.

In a letter Wednesday to Coffey, Gelfond charged that the actions of the company and Edwards family members "appear designed to manipulate" the bankruptcy to profit personally. Goldberg called Gelfond's letter "slanderous" and "absolutely untrue."

Imax, a Canadian company with 240 theaters worldwide, also is facing tough times. It lost $13.8 million in the first quarter, and sales dropped 38% to $35 million.

Edwards has closed more than two dozen cinemas since early last year, including the four-screen Town Center art theater in Costa Mesa. The company now has 58 theaters with 686 screens.

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