A recent decision made by a New York State Supreme Court judge has set an auction date of November 8 for properties owned by Charles Cohen’s Cohen Realty Enterprises. This includes the U.S. Landmark and UK Curzon arthouse cinema chains, which Cohen acquired in 2018 and 2019 respectively. The legal action was taken after Fortress Credit Corp. sued Cohen for defaulting on a significant loan backed by Landmark and other assets. The potential closure of Landmark could have severe repercussions on the already struggling indie film industry, which is attempting to recover from the impact of the Covid-19 pandemic.
Since the legal dispute began, Landmark has already faced challenges with losing leases and closing theaters, including prominent locations such as the Westside Los Angeles theater, as well as theaters in San Francisco, Seattle, and Denver. Independent film distributors have raised concerns about the maintenance of some remaining theaters. However, there are industry executives who recognize the value of these theaters and express disappointment at the possibility of losing them. One executive mentioned, “It’s market to market, but there are still theaters that really perform in that chain. It’s definitely bad if they go away.”
The properties up for auction, which include a design center, office tower, and hotel, served as collateral for loans totaling $534 million from Fortress Credit Corp. If the auction proceeds as planned, it would mark one of the largest Uniform Commercial Code (UCC) claims in the history of New York real estate. The situation is further complicated by the uncommon practice of securing a single large loan with a group of real estate assets. A representative for Charles Cohen previously affirmed the stability of the theaters but was unavailable for comments regarding the recent developments.
Initially, Judge Joel M. Cohen rejected Fortress Credit Corp.’s petition in June due to technicalities but subsequently approved their request in July, paving the way for the upcoming auction. Efforts to reach a consensus on restructuring the loan have been unsuccessful, leading to the likelihood of the auction moving forward. While November seems distant, the future of Cohen Realty Enterprises and its properties remains uncertain. Recent industry developments, such as Sony’s acquisition of Alamo Drafthouse and larger chains like AMC and Cinemark pursuing strategic leases, highlight the evolving landscape of the exhibition business.
The escalating financial crisis faced by Cohen Realty Enterprises and the impending auction of its properties, including the beloved Landmark and Curzon arthouse cinema chains, underscore the challenges in the indie film sector. The outcome of the auction and its impact on the industry are uncertain, with stakeholders closely monitoring the developments leading up to November 8.
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