At the end of last week, Sinemia, a movie ticket subscription service, filed a Chapter 7 bankruptcy petition in Delaware, amidst multiple lawsuits and an investigation by the FTC. The company, which permitted users to purchase monthly or yearly plans for movie passes, ended its operations effective immediately on Thursday, as announced on the company website.
One of the suits is a class action over an alleged scheme to pass hidden processing fees on to customers. Another action was commenced by MoviePass, a competitor, which claims that Sinemia misappropriated patented elements of MoviePass’ business model. And, while the subject matter of the FTC investigation is not public, it is feasible it could be related to the deceptive marketing practice claims of the afore-mentioned class action.
Ultimately, the financial threat of these lawsuits, together with the inability to raise funds and competition from other subscription services and movie theaters building similar purchasing plans, forced the company to shut down operations and pursue Chapter 7 bankruptcy.