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Alamo Drafthouse revealed it is selling itself as the dine-in cinema chain filed for bankruptcy on Wednesday — and one of its new co-owners is a private-equity firm that has been engulfed in a child-abuse scandal.
Altamont Capital Partners — which alongside Fortress Investment Group and Alamo’s founder will buy the Texas-based movie chain after the coronavirus shuttered its 18 theaters nationwide and spurred a “liquidity crisis” — is also the owner of Sequel Youth and Family Services, an operator of taxpayer-funded foster-care facilities that have been accused of widespread abuse and neglect.
According to an explosive report last fall by American Public Media in collaboration with Oregon Public Broadcasting, Sequel has operated facilities nationwide where children were abused, neglected, sexually assaulted and physically mistreated.
The shocking report alleged that at least 40 states at one point sent their most vulnerable children to Sequel’s facilities, which were run by “inexperienced, low-wage” employees. The reports detailed sexual and physical verbal abuse, including beatings from staff, as well as feces-infested living quarters.
“While instances of sexual assault by a staff member are extremely rare among the thousands of kids we help around the country, even one case is unconscionable,” Sequel said in a statement at the time. It also said it had initiated “better hiring practices, background checks, and the installation of cameras and other security measures” to prevent such incidents.
Meanwhile, Altamont Capital has pumped $40 million into Sequel over the past three years to fund its expansion. Sequel operates 44 programs in 19 states including a Michigan facility where a 16-year-old boy died last April after being restrained by staff members.
In February, several members of Congress requested that the Office of Inspector General in the US Department of Health and Human Services investigate youth care and residential facilities, including those operated by Sequel in Oregon.
Altamont did not respond to requests for comment on Wednesday.
Alamo — which sold its assets to a group of lenders that includes existing investor Altamont, affiliates of Fortress Investment Group, and company founder Tim League — did not return requests for comment.
League did, however, comment early Wednesday on Alamo’s prospects. The company plans to keep most of its theaters open after it emerges from bankruptcy, according to reports.
“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,” League said in a statement to news outlets.
Josh Kosman contributed reporting.
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