Edwards Agrees to Deal With Anschutz

Edwards Theatres Circuit Inc. has struck a definitive financial deal with billionaire Philip Anschutz to lift the state’s largest movie-house chain out of bankruptcy.

The Newport Beach chain announced the agreement late Wednesday with Anschutz and Oaktree Capital Management, a Los Angeles distressed-debt specialist.

Although details of the arrangement were not disclosed, industry sources have said Anschutz, who has been pursuing troubled theater chains for his burgeoning entertainment empire, probably will emerge with control of the company. The business has been run by the Edwards family for more than seven decades.

In February, Edwards said Anschutz and Oaktree had tentatively agreed to make a significant investment in the company.

Analysts have estimated the value of the theater chain at nearly $300 million. The company, which filed for bankruptcy in August, owed $217 million to its largest creditor, a consortium of lenders headed by Bank of America Corp.

Anschutz--whose mushrooming holdings include the Kings hockey team, most of Staples Center and part of the L.A. Lakers--also owns a majority stake in United Artists Theatre Co., a nationwide chain based in Englewood, Colo., that filed for bankruptcy last year. He is trying to take control of struggling Knoxville, Tenn.-based Regal Cinemas Inc., the nation’s largest exhibitor.

The Edwards chain, which operates 59 theaters, is the smallest of the exhibitors being pursued by Anschutz, but industry insiders say it would be a prized asset because of its glitzy megaplexes and Southern California stronghold.

“Edwards has always been one of the strongest independent theater circuits in this country. . . . They control Orange County,” said Tom Sherak, a partner with Revolution Studios in Los Angeles.

If Anschutz gains control of Regal and Edwards, he would operate about one-fifth of the nation’s theater screens.

Edwards said it plans to file a reorganization plan in Bankruptcy Court later this month that spells out details of the bailout agreement. The chain will emerge with sufficient cash for its ongoing business as well as access to capital for expansion, Edwards said in a statement.

Edwards is one of many cinema chains that found themselves in financial trouble after going on a megaplex building binge that left them with staggering debts.

The flashy new theaters also lured moviegoers away from older theaters, creating even more financial strains.

Nearly a dozen exhibitors filed for bankruptcy protection, which allows them to sever costly leases.