With the COVID-19 pandemic still running rampant in the United States, businesses (especially restaurants) are finding it nearly impossible to stay afloat. According to a post published on the CPK website by CEO Jim Hyatt, the California Pizza Kitchen Company has filed for voluntary Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Texas.
"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," CEO Jim Hyatt said in a release.
California Pizza Kitchen Files for Bankruptcy
According to CNN, the pizza chain warned of unprofitable locations, however, it has not announced any closures. In Jim Hyatt's letter to the company, he shared that, "Prior to the filing, CPK closed some restaurants in the United States due to the impact of the COVID-19 pandemic and lease-related challenges with our landlords. We do not have plans to close any additional restaurants at this time."
In recent months due to the Coronavirus pandemic, a majority of its locations have seen downturns of sales. The restaurant chain relied heavily on indoor dining. Revenues are currently down 40% compared to the same time a year ago, it said in a filing. Even though some states have lifted the temporary closure of indoor dining, Americans are weary to sit down in restaurants still, making profits low and forcing months of unpaid rent to stack up.
The California Pizza Kitchen Cookbook
CPK isn't the only restaurant looking for assistance at this time. CEC Entertainment (Chuck E. Cheese's parent company), Italian chain Vapiano, Le Pain Quotidien's US unit, NPC International, and FoodFirst Global Restaurants have all filed for bankruptcy.
All CPK locations will be open for business (take out, delivery, third party, and select dining room and patio locations) during the new financing agreement. Gift cards and CPK Rewards points will still be valid and retain value.
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