California Pizza Kitchen files for Chapter 11 bankruptcy
The California Pizza Kitchen restructuring agreement is meant to equitize the company’s debt
Joanna Fantozzi, Nation's Restaurant News
Jul 30, 2020
Playa Vista, Calif.-based, 250+-unit California Pizza Kitchen has filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas on July 30, citing financial troubles due to the ongoing coronavirus pandemic. The restructuring agreement is meant to equitize the company’s long-term debt. During the restructuring period, the casual dining pizza chain will close unprofitable locations, reduce its long-term debt load, and “quickly emerge from bankruptcy as a much stronger company.”
“Today’s announcement is a step towards a stronger future for California Pizza Kitchen,” Jim Hyatt, CEO of California Pizza Kitchen said in a statement. “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.”
In accompanying court documents, Jim Hyatt explained that starting in February CPK pivoted from its usual in-store dining operations model to begin offering meal kits to consumers through its new “CPK Market,” in addition to temporarily closing 46 locations that were unable to pivot to the new off-premise model and reducing corporate payroll by 35%. In April, the company took on a $30 million loan from outside lenders to take on its debt, and is currently seeking $46.8 million in debtor-in-possession financing.
“The company has just $13.5 million of cash on hand and has approximately four months of unpaid rent obligations at the majority of its locations, including numerous default notices...