A New York State Supreme Court judge has scheduled an auction for properties owned by Charles Cohen’s Cohen Realty Enterprises, including the U.S. Landmark and UK Curzon arthouse cinema chains that he purchased in recent years. This decision comes after Fortress Credit Corp. sued Cohen for defaulting on a significant loan backed by Landmark and other assets. If Landmark were to close its doors, it would deal a substantial blow to the indie film industry, which is already facing challenges in the aftermath of the Covid-19 pandemic.
Following the lawsuit, Landmark has experienced setbacks such as losing leases and shutting down locations, including the Westside Los Angeles theater and venues in San Francisco, Seattle, and Denver. Independent distributors have raised concerns about the upkeep of some remaining theaters, but there is still a sentiment of disappointment among industry executives at the prospect of losing these establishments.
The properties owned by Cohen Realty Enterprises, serving as collateral for loans from Fortress amounting to $534 million, are now at risk of being auctioned off. This potential auction could mark one of the largest Uniform Commercial Code (UCC) claims in the history of New York real estate. It is uncommon for such a significant loan to be secured by a group of real estate assets, as noted by individuals familiar with the case.
Uncertain Future
Despite assurances earlier this year that the theaters were not in danger, the situation has escalated to the point where an auction date has been set. While the original request for an auction was denied on technical grounds, a subsequent request was approved last week. The judge’s decision to move forward with the auction indicates that an agreement to restructure the loan is unlikely to be reached in time. As November approaches, the fate of Landmark and Curzon theaters remains uncertain.
The auction of Cohen Realty Enterprises’ properties comes at a time when the exhibition industry is witnessing significant shifts. Companies like Sony have recently acquired theater chains, and larger players like AMC and Cinemark have been selectively taking over leases of theaters in strategic locations. However, the consolidation and reshaping of the industry landscape indicate a complex environment for independent theaters like Landmark and Curzon.
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