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Frank Theatres files for Chapter 11 bankruptcy

Matthew Lane • Sep 24, 2018 at 1:30 PM

KINGSPORT — A Florida-based theater company that once had a location in the Fort Henry Mall has filed for Chapter 11 bankruptcy protection.

Frank Theatres of Jupiter, Fla., filed the notices in U.S. Bankruptcy Court in the Southern District of Florida this summer. The filings were for four different entities: Frank Entertainment Companies, Frank Theatres Management, Frank Investments and the Rio Mall shopping center in Rio Grande, New Jersey.

According to court records, the reason for the bankruptcy filing is because Frank Theatres was unable to absorb the expenses associated with the closing of its unprofitable theaters. The closings created significant liabilities with the theaters’ former landlords, the court filings state.

As for the bankruptcy of the Rio Mall property, Frank’s said in court documents the mall faced financial difficulties because of a slow payment by one significant tenant and the vacancy of a majority of the shopping center due to a K-mart store closing in 2017.

The Times News reached out to the owner and president of the company, Bruce Frank, for comment, but he did not respond.

ABOUT FRANK’S

Frank Theatres moved into the Fort Henry Mall in the summer of 2013, filling the space once held by Marquee Cinemas. Frank’s renovated the existing theaters and opened for business later that summer.

During its time in Kingsport, the company had talked about expanding its footprint into the parking lot with a two-story addition containing a restaurant, arcade and an 85-foot-tall IMAX theater. The Kingsport Economic Development Board even offered an $800,000 incentive package to Frank Theatres if the company would bring the IMAX to the mall and meet certain other criteria.

But that never happened.

UNPAID RENT

In November 2016, Hull Property Group (the new owners of the Fort Henry Mall) filed a complaint against Frank Theatres in an attempt to evict the theater company from the property. HPG claimed the company had not paid rent since March 2016, some $328,000, and had not fully paid for new projectors with the money HPG fronted to Frank’s for renovation and construction.

Frank’s denied the allegations, and though the matter is still pending in Sullivan County Circuit Court, the two companies did reach an agreement on vacating the property. Frank’s left in April 2017.

At one time, Frank Theatres owned and operated 25 theaters and 256 screens in seven Eastern and Southern states and claimed to be in the process of building 25 other Frank Theatres Cinebowl and Grilles along the East Coast.

BANKRUPTCY FILINGS

According to the bankruptcy filings, the various Frank companies operate five movie theaters in four states and own the Rio Mall property along with six other properties.

The theater operations generated $12.4 million last year and so far this year have generated $7.8 million in gross income. Its obligations are more than $6.7 million, including $54,500 in unpaid taxes, court records state.

Frank Entertainment Companies has approximately 140 employees. Bruce Frank, the sole owner of this part of the business, has a salary of $300,000 a year.

On the commercial real estate side of the business — Frank Investments — this company generated $1.86 million in gross income last year and $740,000 so far this year. Its obligations include $373,000 in unpaid taxes and bank loans of nearly $17.7 million, court records state.

Finally, the Rio Mall property generated $1.46 million in gross income last year and $637,000 in 2018. It owes the bank $8.8 million and has a $756,000 mechanical lien filed against it.

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