Bosses at Cineworld are considering whether to put the world’s second largest cinema chain into bankruptcy.

They have responded to speculation today that they are looking at options for restructuring the business, which is struggling under heavy debts.

Despite the Wall Street Journal reporting that the company was on the verge of declaring it is bankrupt, which allegedly would affect UK branches, the chain has avoided clarifying the future of the UK.

It did however say that a Chapter 11 bankruptcy filing in the US is possible. Chapter 11 is often referred to as reorganisation bankruptcy and does not mean the end of the line for the company.

The company explained: “Cineworld would expect to maintain its operations in the ordinary course until and following any filing and ultimately to continue its business over the longer term with no significant impact upon its employees.”

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A Chapter 11 gives companies a chance to propose a reorganisation, and the banks, suppliers and employees they owe money to are allowed to vote on the plan.

After the filing is made, the company remains in control of its assets and does not have to shut down or liquidate its business to pay off debts.

It is also protected from foreclosure and repossessions.

Importantly, the company’s cinemas would be able to continue to trade throughout the whole process.

The company said: “Cineworld and Regal theatres globally are open for business as usual and continue to welcome guests and members.

“The strategic options through which Cineworld may achieve its restructuring objectives include a possible voluntary Chapter 11 filing in the United States and associated ancillary proceedings in other jurisdictions as part of an orderly implementation process.

“Cineworld is in discussions with many of its major stakeholders, including its secured lenders and their legal and financial advisers.”

Cineworld last week told investors that, while demand has recovered a little following the pandemic, recently customers have not been flocking to cinemas in the numbers that had been expected.

“These lower levels of admissions are due to a limited film slate that is anticipated to continue until November 2022 and are expected to negatively impact trading and the group’s liquidity position in the near term,” it said.

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