California Pizza Kitchen executives are hoping that a new financial restructuring agreement will help the company recover from losses caused by the coronavirus pandemic in recent months.
On Thursday, the company announced that it has filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Texas.
As part of a new restructuring agreement with lenders, the company will receive $46.8 million in new financing to help its restaurants continue operations. The chain currently operates about 250 restaurants in the U.S.
California Pizza Kitchen CEO Jim Hyatt shared the news with customers in an open letter on the restaurant's website and said he hopes the move will position the company for future growth and success.
"This proactive filing will allow us the ability to reduce our long term debt load and emerge as a much stronger company. We anticipate a short stay in Chapter 11 and expect to progress on an expedited timeline — our goal is to complete the Chapter 11 process in under three months," he wrote.
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While the company begins the process of restructuring, its restaurants will remain open for takeout and delivery, as well as dining room or patio service where available. The chain said all gift cards and CPK Rewards points will still be honored.
Like many other restaurants, California Pizza Kitchen has been hit hard in recent months and has already closed several company-owned restaurants in the U.S. due to the impact of the coronavirus pandemic and lease-related challenges with its landlords. A company spokesperson declined to reveal how many locations have closed since March, but said the company is in discussions with its landlords to create a plan for select restaurants.
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According to Hyatt's letter, the company doesn't have plans to close any additional locations at this time.
“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," the CEO wrote. "Throughout this process, we will continue to deliver the same innovative, California-inspired cuisine that we have been serving for over 35 years."
California Pizza Kitchen is the latest major restaurant chain to file for bankruptcy. In recent weeks, a major Pizza Hut franchisee and Chuck E. Cheese's parent company made similar announcements.