AMC Theatres in Florida gets sued for not paying rent.

Last Updated on July 30, 2021

AMC Theatres can't catch a break. After shuttering their doors back in March due to he COVID-19 pandemic, it was revealed that the chain was pretty much in debt and. in danger of not being able to reopen if these movie theater closures last after July. AMC was given an out by possibly filing for Chapter 11 bankruptcy but they're trying to avoid that that by raising $500 million dollars to keep them afloat through July so they'll be in a decent spot before they can reopen.  This hasn't stopped the landlords at a shopping mall in Hialeah, Florida from suing that particular AMC location for not paying rent for the month of April.

Per "Variety", the landlords are seeking $7.5 million in damages. Palm Springs Mile Associates, Ltd. filed the suit yesterday in Miami, claiming that the theater chain has yet to pay the $52,153.87 monthly rent on the AMC Hialeah 12. This comes after AMC revealed to landlords across North America that they were not going to be able to pay rent, due to the world's current state of affairs.

The suit is calling the failure to pay rent a breach of contract thus "it has triggered a requirement for immediate payment of the balance of the lease", which is why the total balloons to $7.5 million. The lawsuit states that the landlord understands why AMC Theatres cannot pay the rent, but there is nothing they can do about it:

"Under the express terms and provisions of the Lease and Guaranty, however, Defendant is obligated to pay Rent and that obligation is not excused."

AMC has not commented on the lawsuit as of this writing. AMC Theatres, as mentioned before, is dealing with a lot at the moment in the wake of the natonwide closures but Wall Street did respond favorably to the $500 million debt sale announcement, which is giving the chain some breathing room. That being said, there could be further lawsuits on the way over rent demands but, as of now, the Florida location is the only one to have taken extreme legal action thus far.

This is an interesting situation because AMC is in a bind where they're not making money because they're closed but the landlords are also in a bind because they need their rent. I'm not too familiar about rent forgiveness for businesses so I'm not sure if AMC would qualify but it will be interesting to see if other landloards at other locations take this kind of action in the coming weeks.

Do YOU think it was necessary for them to sue or should they work something out?