The firm, the second biggest cinema chain in the country, has reportedly called in lawyers in preparation for a move which will impact branches across the region – including at Bentley Bridge.
The 14-screen cinema first opened its doors on October 10, 1997, and has been attracting visitors from far and wide who were buzzing to see the new releases.
However the firm said earlier this week it was because a lack of blockbuster movies has hit audience numbers which, in turn, had "negatively impacted" them.
The stark news will come as a shock for people living in Wednesfield, and other parts of Wolverhampton, as it comes off the back of the site undergoing a revamp.
Councillor Phil Bateman, who represents Wednesfield North, said: "I think most people will find this to be a bombshell. We all know the economy is in a difficult situation and this news will be quite a body-blow to the entertainment industry and those that rely on it for leisure purposes in and around Wolverhampton and Wednesfield."
The cinema reopened in 2020 and offered cinemagoers the 4DX experience which utilised effects such as wind and water through high-tech motion sensors following the revamp.
Meanwhile they were also treated to ScreenX – said to be the world's first use of multi-projection cinema technology – to create a 270-degree movie viewing experience.
Guests could also "supersize" their experience in Superscreen - with multidimensional Dolby Atmos sound and 4K film projection on a massive wall-to-wall and ceiling-high screen, which is taller than a double decker bus.
The refurbished cinema will boasted a new Starbucks, refurbed standard screens with new seats, and state-of-the-art updates to the foyer and concessions stands.
Philippa Childs, head of entertainment and media union Bectu, said: "This is very worrying news, not least for the UK's Cineworld and Picturehouse workforce who have already been through a tumultuous time during the pandemic.
"The UK's cinema industry suffered an incredible blow due to Covid-19 and this latest news will be very unsettling for cinema workers.
"We will do everything we can to support our members during this challenging time and will be looking to Cineworld to mitigate the impact of any bankruptcy arrangements on its employees."