CEO has expressed an interest in buying the company out of bankruptcy
By Dave Sebastian and Soma Biswas Wall Street Journal, Updated Aug. 25, 2021 11:32 am ET
Tix Corp. filed for bankruptcy after the Covid-19 pandemic forced the Las Vegas discount ticket seller to close its Tix4Tonight-branded booths on the Strip and its online ticket-sales operations for more than a year.
The company filed for chapter 11 protection in the U.S. Bankruptcy Court in Las Vegas on Wednesday, saying it would sell substantially all its assets. Chief Executive Mitch Francis has expressed an interest in buying the company out of bankruptcy, according to court papers filed by Kimberly Simon, Tix’s chief operating officer.
Founded in 1993, the company sells tickets to shows, tours and attractions out of three booths operating on the Las Vegas Strip, according to court filings. The company said it was forced to close its ticket booths in March 2020, when the pandemic shut down all restaurants, bars, hotels and entertainment venues in the city, and lay off its employees.
Even after reopening the booths in June 2021, Tix continued to struggle financially, in part because as shows and tours resumed, high demand meant there were fewer tickets available for discounters, Ms. Simon’s filing said.
Tix said it expects normal operations to continue without affecting customers.
For most of Tix’s existence, it has been the No. 1 discount show ticket seller in Las Vegas, with annual revenue approaching $13 million in 2018 and 2019, according to court papers.
But Tix’s business had started to erode before the pandemic because of increasing competition, especially from online ticket sellers, Ms. Simon said. For example, in 2017 MGM Resorts International started selling discounted tickets from its own booths and stopped offering tickets to Tix for Cirque du Soleil, which had been an important source of revenue for the discounter.
Tix said it is seeking bankruptcy financing from lenders that could help the company operate its business and meet its financial obligations, including the timely payment of employee wages and benefits and lease payments.
The company borrowed $1.2 million under two separate Paycheck Protection Program loans and received an additional $150,000 loan from the federal government’s Economic Injury Disaster Loan program.
Travel and leisure activities have picked up this summer along with the loosening of Covid-19 restrictions. But with the recent spread of the Delta variant, shows are being canceled, mask requirements are returning to casinos and other locales, and consumers are reconsidering their travel plans. The reaction to the increased cases isn’t as pronounced as it was last year, but it has caused travel and leisure executives to notice a dip in business.
Tix has hired Griffin Hamersky LLP as bankruptcy counsel and Rock Creek Advisors LLC as its financial adviser for the bankruptcy case, numbered 21-14170.