A New York State Supreme Court judge has set an auction date for properties owned by Charles Cohen’s Cohen Realty Enterprises. The properties include the U.S. Landmark and UK Curzon arthouse cinema chains that Cohen acquired in 2018 and 2019. The auction date was set due to a lawsuit filed by Fortress Credit Corp. against Cohen for defaulting on a large loan backed by Landmark and other assets.
The potential closure of Landmark theaters would be a significant blow to the indie film business, which is still recovering from the impacts of the Covid-19 pandemic. Several locations, including the Westside Los Angeles theater and theaters in San Francisco, Seattle, and Denver, have already closed. Independent distributors have raised concerns about the upkeep of some remaining theaters, but losing them would still have a negative impact on the industry.
The properties being auctioned off were collateral on loans totaling $534 million from Fortress. If the auction proceeds, it would be one of the largest Uniform Commercial Code (UCC) claims in New York real estate history. It is unusual to have a single large loan secured by a group of real estate assets, according to a source familiar with the case. Despite previous statements that the theaters were not in jeopardy, the auction will proceed as scheduled in November.
While Landmark theaters face uncertainty, there have been recent developments in the exhibition industry. Sony’s acquisition of Alamo Drafthouse and the interest shown by larger chains like AMC and Cinemark in selective leases indicate a shifting landscape. These companies are focusing on strategic locations and individual theaters rather than entire circuits.
The future of Cohen Realty Enterprises and the indie cinema industry remains uncertain as the auction of properties approaches. The closure of Landmark theaters would have a significant impact on the indie film business, which is already facing challenges in the aftermath of the pandemic. While there have been some recent deals in the exhibition industry, the fate of Landmark and its associated properties will be closely watched as the auction date approaches.