After a five-month battle against the COVID-19 pandemic, California Pizza Kitchen has lost. According to today’s statement from CEO Jim Hyatt, the company has filed for bankruptcy protection.
The company was founded 35 years ago. As of February, there were 250 California Pizza Kitchens serving customers. During the pandemic, its restaurants pivoted into mini-marts, meal kits, and a takeaway concept called “CPK Market.” As of today, 50 locations are still “temporarily” closed, and four have permanently closed.
Of its approximate 200 locations that are currently operational, Hyatt claims, “We do not have plans to close any additional restaurants at this time.”
In April, the company accepted an additional $30 million loan. Today, Hyatt says his company has secured an additional $46.8 million to continue operations during the Chapter 11 process. Prior to this week’s cash infusion, the company had $13.5 million of cash on its balance sheet. The company is four months delinquent on rent payments for the majority of its locations.
California Pizza Kitchen filed for Chapter 11 in U.S. Bankruptcy Court for the Southern District of Texas. Its case number is 20-33752. A Houston courthouse has assigned the case to Judge Marvin Isgur.
The company will be negotiating with its debtors, attempting to convert some of the company’s long-term debt into equity, thereby lowering its cash outlay. Counsel to California Pizza Kitchen is the law firm Kirkland & Ellis. Guggenheim Securities is the company’s financial advisor and investment banker. Alvarez and Marsal is the restructuring advisor.
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