MoviePass, the movie theater ticket subscription service that ceased operations last year, is getting back to business.
A Southern District of New York bankruptcy court judge approved the sale of MoviePass to its cofounder Stacy Spikes. The sale approval took place on Monday, while the actual financial transaction happened on Wednesday.
In a statement to Business Insider, Spikes said that he had placed a bid to the trustee handling the bankruptcy of Helios and Matheson Analytics (HMNY), the former parent company of MoviePass.
“I can confirm that we acquired MoviePass out of bankruptcy on Wednesday,” Spikes told the news outlet. “We are thrilled to have it back and are exploring the possibility of relaunching soon. Our pursuit to reclaim the brand was encouraged by the continued interest from the moviegoing community. We believe, if done properly, theatrical subscription can play an instrumental role in lifting moviegoing attendance to new heights.”
MoviePass was part of a bankruptcy auction of HMNY assets in June 2020, but there were no competitive bids at the time the auction ended. Spikes revealed to Business Insider that he only made the offer to acquire MoviePass last month, as he had been working on completing the necessary amount of money to get the company back since this summer.
Spikes didn’t disclose the amount of his bid, but he did share that it was lower than the $250,000 minimum that the trustee had set last year. Spikes also pointed out that customer data and email addresses were not part of the sale. According to Variety, HMNY listed the estimated value of MoviePass between $1 million and $10 million.
Spikes is hoping to relaunch MoviePass sometime next year. In fact, a new website for the relaunch is now up (iwantmoviepass.com) and the company’s logo has been updated. The new logo, which you can see at the beginning of the article, features a black background with white lettering, abandoning the original’s red background.
Founded by Spikes and Hamet Watt in 2011, MoviePass lets moviegoers see a certain number of films a month in theaters for one monthly price. After it was purchased by HMNY in 2017, the company ― under the leadership of HMNY CEO Ted Farnsworth and MoviePass CEO Mitch Lowe ― launched a $10 a month subscription price that allowed members to see a movie a day.
Though the company had attracted over 3 million subscribers in less than a year since it offered the $10 price point, Spikes had raised concerns about its sustainability. Unfortunately for him, it appeared that his reservations about the low subscription fee had contributed to his firing in 2018.
Fast forward to January 2020, HMNY filed for Chapter 7 bankruptcy and ceased all business operations. At the time of its bankruptcy filing, it said that it was under pending investigations by the FTC, SEC, four California district attorneys, and the New York attorney general. Just this June, Farnsworth and Lowe settled with the FTC and reached a $400,000 settlement with the California district attorneys.
The settlements came after it was discovered that MoviePass attempted to install “tripwires” meant to make it more difficult for its subscribers to actually use their MoviePass account. Those “tripwires” included unnecessarily complex ticket-verification requirements, faking “suspicious activity” on users’ accounts, and freezing them until they contacted support. There were also reports that MoviePass was changing the passwords of frequent users to create a delay at the box office, putting pressure on users to just buy the movie ticket to avoid the hassle.