- The Washington Times - Friday, September 7, 2001

KNOXVILLE, Tenn. (AP) Regal Cinemas, the nation's largest movie theater chain, said yesterday it will file for Chapter 11 bankruptcy protection as part of a restructuring plan that will shift ownership to a group led by Denver billionaire Philip Anschutz.

The filing "presents the most effective means to restructure the company's debt, strengthen its capital structure and position Regal to compete effectively in the film exhibition industry," Regal Chairman and Chief Executive Officer Michael Campbell said in a statement.

Regal, like several other major movie chains, aggressively expanded in the late 1990s and ended up with too many theaters. The chain closed 98 theaters with 646 screens this year but still remains tops in North America with 3,898 screens in 338 locations.

The company owns three locations in the Washington area multiplexes with stadium seating in Rockville, Ballston and Sterling, Va.

Under the reorganization plan, Regal's unsecured creditors stand to recover up to 100 percent of their claims through a $75 million pool set up by the new owners, the company said.

The plan will allow Mr. Anschutz and his partners to "exchange the debt he has purchased for an equity position" in Regal, Regal spokesman Dick Westerling said.

Mr. Anschutz the majority owner of United Artists Theater Corp. through his investment unit, Anschutz Corp. and Los Angeles investment fund partner Oaktree Capital Management already own $500 million to $750 million of Regal's debt, making them Regal's major creditors.

Anschutz Corp. officials did not immediately return a call for comment.

"This should be a very seamless event. It will be business as usual and there should be no disruption in operations," Mr. Campbell told the Knoxville News-Sentinel.

Mr. Campbell said all parties were expected to agree to the plan before the filing. The bankruptcy filing will be made within 45 days, and the reorganization is expected to be completed 90 days later.

Regal was acquired for $1 billion in 1998 by leveraged buyout firms Kohlberg Kravis Roberts & Co. of New York and Hicks, Muse, Tate & Furst Inc. of Dallas.

For nearly a year, the buyout firms and Anschutz have engaged in heated negotiations over control of Regal. Under the new deal, KKR and Hicks, Muse will receive nothing but will be free from Regal's debt.

Anschutz and Oaktree also have controlling interests in the Edwards theater chain. With Regal in the fold, Anschutz and Oaktree would own some 6,000 screens, or 20 percent of the theater industry.


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