The New York State Supreme Court recently set a November 8 auction date for properties owned by Charles Cohen’s Cohen Realty Enterprises. This includes the U.S. Landmark and UK Curzon arthouse cinema chains he acquired in 2018 and 2019. These properties have been under scrutiny after Fortress Credit Corp. sued Cohen for defaulting on a large loan backed by Landmark and other assets. If Landmark were to close, it could have significant implications for the independent film business, which is still recovering from the impacts of Covid-19.
The closure of Landmark theaters has already resulted in lost leases and closed locations in key cities like Los Angeles, San Francisco, Seattle, and Denver. Independent distributors have raised concerns about the upkeep of the remaining theaters. While some industry executives acknowledge the challenges, they also recognize the importance of these theaters for the indie film market. Losing them would be a significant loss for both filmmakers and audiences.
The properties owned by Cohen Realty Enterprises, including theaters, a design center, office tower, and hotel, serve as collateral for loans totaling $534 million from Fortress. The upcoming auction is expected to be one of the largest Uniform Commercial Code (UCC) claims in New York real estate history. It is uncommon to have such a large loan secured by a group of real estate assets, highlighting the financial complexities at play.
A representative for Charles Cohen previously stated that the theaters were not in jeopardy and would continue to support independent film. However, with the auction date set, the future of these properties remains uncertain. Judge Joel M. Cohen’s decision to move ahead with the auction, despite initial petitions and technical challenges, indicates that the legal battle is intensifying. While there was a window for restructuring the loan, it seems unlikely that an agreement will be reached.
Amidst these challenges, there have been notable developments in the exhibition industry. Sony’s acquisition of Alamo Drafthouse and the leasing activities of larger chains like AMC and Cinemark demonstrate ongoing changes in the market. While some theaters face closure, others are seizing opportunities for growth and expansion. The outcome of the auction could further shape the landscape of independent cinema in the coming months.