California Pizza Kitchen (CPK), headquartered in Playa Vista, California, is the latest major pizza chain forced into Chapter 11 bankruptcy by the coronavirus pandemic.
The company announced today that it has entered into a restructuring support agreement with lenders that will equitize most of its long-term debt. The pre-negotiated filing will allow the chain “to close unprofitable locations, reduce its long-term debt load, and quickly emerge from bankruptcy as a much stronger company,” CPK said in a press release.
“Today’s announcement is a step towards a stronger future for California Pizza Kitchen,” CEO Jim Hyatt said. “The unprecedented impact of COVID-19 on our operations certainly created additional challenges, but this agreement from our lenders demonstrates their commitment to CPK’s viability as an ongoing business. Throughout this process, we will continue to deliver the same innovative, California-inspired cuisine that we have been serving for over 35 years.”
Earlier this year, as the pandemic’s severity grew nationwide, California Pizza Kitchen rolled out a new model called CPK Market, offering specialty meal kits as well as individual pantry, fruit, vegetable and meat items, with some locations promising to deliver pantry items to customers’ doorsteps. The company temporarily closed more than 40 locations that were unable to pivot to the new model and reduced its payroll by 35 percent, according to Nation’s Restaurant News.
California Governor Gavin Newsom ordered restaurants statewide to close their indoor dining services in July. That was the second dine-in lockdown in California. The state began a phased-in reopening process in May, allowing restaurants to resume offering dine-in, but the pandemic has worsened dramatically in California since then.
CEC Entertainment, which operates the family-oriented Chuck E. Cheese chain, filed for Chapter 11 bankruptcy in June while spinning off a new delivery-only brand called Pasqually’s Pizza & Wings. Pizza Hut’s largest U.S. franchisee, NPC International, also filed for Chapter 11 protection in July.