The Newport Beach theater chain filed for Chapter 11 bankruptcy protection last month, saying it had lost $40 million last year on $299 million in revenue. The filing has tossed many of the leases it holds at commercial real estate developments across Southern California into uncertainty, worrying many landlords that they might not get the rent that they're owed.

Yesterday's ruling won't soothe the concerns of Edwards' lenders, either. The banks are owed $215 million, and the bankruptcy filing was made just days before they were supposed to receive a $13-million payment.

Edwards Theatres had earlier pledged proceeds from inventory sales as collateral for the bank loans. Thursday's ruling essentially sets that provision of the loan agreements aside.