California Pizza Kitchen Has Filed For Bankruptcy
California Pizza Kitchen filed for Chapter 11 bankruptcy this week, partly citing the effects of COVID-19 on the restaurant industry.
CEO Jim Hyatt announced the filing on Thursday in a letter to CPK's employees and customers, saying that the company filed in order to move into a restructuring support agreement with its lenders. He shared that the agreement includes $46.8 million in new financing and hoped the move would set the company up for "future growth and success."
“Today’s announcement is a step towards a stronger future for California Pizza Kitchen,” he said in an additional release:
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.
The chain also added that they hope to conclude the Chapter 11 process in about three months. In his letter, Hyatt said that CPK does not expect to close any additional restaurants as a result of the filing (it had previously closed some during the COVID-19 pandemic). He also reiterated that the chain remains open for take-out, delivery, and seating where available, and that gift cards and points would continue to be honored.
The chain is just the latest to see Chapter 11 filings and closings as the pandemic has an outsized effect on the food industry, particularly the restaurant industry. Recently, the parent company behind Chuck E Cheese filed for Chapter 11 and a massive Pizza Hut franchisee announced they were doing the same. Chains like Ruby Tuesday, McDonald's, Dunkin', and TGI Friday's have all discussed or announced closings in the past few months, and many more have revealed lower sales as dining rooms remain closed and more people stay at home.
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