California Pizza Kitchen Filed for Bankruptcy Due to COVID-19 Closures
Written by SOURCE on July 31, 2020
CNN Business has learned that California Pizza Kitchen filed for Chapter 11 bankruptcy Thursday. The filing is due to the impact of the coronavirus pandemic on the pizza chain’s business, as the lingering ban on indoor dining across the country has prevented CPK from making money off of on-premise service, which accounts for 80 percent of its sales.
“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 considers that by filing, they will “reduce its long-term debt load, and quickly emerge from bankruptcy as a much stronger company.” CPK has around $13 million cash on hand with nearly $47 million secured in new financing. The chain’s financial limitations have prevented them from paying rent on a majority of its locations over the last few months.
NPC International, a franchisee for over 1,200 Pizza Hut locations in the United States, filed for bankruptcy earlier this month. Much like California Pizza Kitchen, NPC explained in their filing that Chapter 11 was necessitated by prolonged restaurant shutdowns due to COVID-19.
NPC’s growing debt and a struggling business could be perceived as a byproduct of the pandemic’s unrelenting stranglehold on the entire restaurant industry.
Yahoo Finance reports Steak ‘n Shake and Checkers could be staring down the barrel of their own financial woes, with the latter reportedly hiring advisors late last month to explore a possible restructuring.
