Austin's homegrown movie chain is entering its next act — bankruptcy. As part of the Alamo Drafthouse's upcoming court-supervised Chapter 11 bankruptcy process, it will also close three theaters, including its iconic Ritz location in downtown Austin.

Along with the Ritz, the Drafthouse will also be closing its New Braunfels' Marketplace location as well as a theater in Kansas City.

The 90-year-old Ritz has operated as part of the Drafthouse for the past 13 and a half years, playing host to SXSW Film, movie premieres, and countless special events. The theater closed in March 2020 due to the pandemic, and though some Drafthouse locations have since reopened with limited capacity and rentable auditoriums, the Ritz has remained shuttered.

"For nearly [fourteen] years, The Ritz – the spiritual successor to our original location at 409 Colorado – has been the beating, fiery, cinephile heart of Alamo Drafthouse in Austin," the theater said in a goodbye blog.

In an internal email, the company said the financial impact of the COVID-19 pandemic led to a restructuring of its ownership and subsequent closures. In addition to founder Tim League, Dave Kennedy, and Altamont Capital Partners, the Alamo Drafthouse recently brought on the New York-based Fortress Investment Group to "ensure we have adequate financing going forward."

This does not, however, mean the Drafthouse is going out of business, the company stressed. Instead, it says the bankruptcy and investor reorg will allow the company to get through COVID-19 and reposition itself on the other side.

Like all movie theaters, the Alamo Drafthouse has struggled to find new revenue streams over the past year while movie theaters have remained either closed or operating with very limited attendance. In April 2020, the Drafthouse rolled out Virtual Cinema, a partnership that allows movie fans to stream new releases at home. The Austin-based theater chain also added to-go cocktail and food service in an attempt to drum up business through the pandemic.

Despite entering Chapter 11, the company is optimistic that it will survive.

"Because of the increase in vaccination availability, a very exciting slate of new releases, and pent-up audience demand, we're extremely confident that by the end of 2021, the cinema industry — and our theaters specifically — will be thriving," the email said.