<PAGE> 1
FOR IMMEDIATE RELEASE EXHIBIT 99
CONTACT: David Calusdian
Sharon Merrill Associates
(617)542-5300
Information Hotline
(877)495-1967
GC COMPANIES, INC. TO RESTRUCTURE UNDER CHAPTER 11
Chestnut Hill, MA, October 11, 2000 -- GC Companies, Inc. (NYSE: GCX),
parent company of General Cinema Theatres, Inc., announced today that GC
Companies and certain of its domestic subsidiaries, including General Cinema
Theatres, Inc., are filing voluntary petitions to reorganize their business
under Chapter 11 of the U.S. Bankruptcy Code. The Company further stated that
certain of its subsidiaries in Florida, Georgia, Louisiana and Tennessee are
filing Chapter 7 liquidation proceedings. The filings were made in the United
States Bankruptcy Court for the District of Delaware. In its filings, the
Company will report total assets of $328.9 million and total liabilities of
$195.1 million as of August 31, 2000.
The Company believes that Chapter 11 reorganization provides the
Company with the most effective means to terminate and restructure unprofitable
leases and position the Company to succeed in today's highly competitive
marketplace. After a review of the various alternatives available by a Special
Committee of its independent directors and outside professional advisors, the
Company concluded that utilizing the Chapter 11 process to complete its
restructuring is in the best long-term interests of the Company and all of its
stakeholders.
The Company believes that an oversaturation of the market created by a
surge in the construction of multi-screen "megaplexes" during the past several
years, has created intense competitive pressures. This has resulted in a
downturn in the theatre industry due to the decline in attendance at older
theatres in favor of state of the art megaplexes. A number of the Company's
competitors including United Artists, Edwards, and Carmike theatres have filed
Chapter 11 proceedings as a result of these industry pressures.
Through the Chapter 11 process, the Company expects to be able to
terminate unprofitable leases, reduce the Company's operating expenses and make
necessary improvements to the business to create a strong competitive future for
General Cinema. While the Company completes the restructuring, its operations
are expected to continue. As a part of its previously announced plan to
concentrate resources on its operations in the Northeast and Midwest, General
Cinema recently closed 36 under-performing theatres with 264 screens in Florida,
Georgia, Louisiana, North Carolina, Texas, Ohio, New Jersey, California and
Washington, and will close 17 additional theatres with 103 screens in October.
The Company is arranging up to $45 million of debtor in possession
financing to provide the Company with resources to fund its operations during
the Chapter 11 proceedings. Employees will continue to be paid and vendors will
be paid for post-petition purchases of goods
<PAGE> 2
and services in the ordinary course. The Company intends to seek Court approval
to honor policies regarding gift certificates, movies passes and other customer
programs, as well as employee benefit programs.
Richard A. Smith has today resigned as Chief Executive Officer, and
Robert A. Smith has resigned as President and Chief Operating Officer to avoid
potential conflict, in implementing the reorganization, between their positions
with GC Companies and those that they hold at Harcourt General, Inc., which has
guaranteed certain of the Company's lease obligations. Also to avoid potential
conflicts, John G. Berylson, son-in-law of Richard A. Smith, resigned as Senior
Vice President and Chief Investment Officer of GC Companies. Richard A. Smith
will continue to serve as Chairman of the Board of Directors of the Company, but
he will not serve on the Special Committee of the Board which has been formed to
address all issues that relate to Harcourt General, Inc.
G. Gail Edwards, who has been with the Company since 1996, was named
President and Chief Operating Officer in addition to her current position as
Chief Financial Officer and will be responsible for the restructuring and the
operations of the Company. Frank T. Stryjewski remains as President of General
Cinema Theatres, Inc., the subsidiary which holds the Company's domestic theatre
operations. Paul R. Del Rossi remains as Chairman of General Cinema
International, Inc. which is not filing for reorganization and will continue to
manage its joint venture in South America.
Forward-Looking Statements
Forward-looking statements in this press release are made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. The words "expect," "anticipate," "intend," "plan," "believe," "seek,"
"estimate," and similar expressions are intended to identify such
forward-looking statements; however, this press release also contains other
forward-looking statements. GC Companies cautions that there are various
important factors that could cause actual results to differ materially from
those indicated in the forward-looking statements; accordingly, there can be no
assurance that such indicated results will be realized. Among the important
factors that could cause actual results to differ materially from those
indicated by such forward-looking statements are: the overall viability of the
Company's long-term operational reorganization and financial restructuring plan;
the involvement of our secured and unsecured creditors in the Chapter 11
proceedings; the bankruptcy court approval of debtor in possession financing and
numerous other approvals incident to our operations in Chapter 11 and our
ultimate reorganization; competitive pressure in GC Companies' market;
dependence upon motion picture productions and performance; the ability to
achieve planned openings or closings of theatres and screens; seasonality;
business conditions in the movie industry and other complementary markets;
general economic conditions and the risk factors detailed from time to time in
GC Companies' periodic reports and registration statements filed with the
Securities and Exchange Commission, including GC Companies' Annual Report on
Form 10K for the year ended October 31, 1999. By making these forward-looking
statements, GC Companies does not undertake to update them in any manner except
as may be required by GC Companies' disclosure obligations in filings it makes
with the Securities and Exchange Commission under Federal securities laws.
