California Pizza Kitchen Latest Chain to File for Bankruptcy
(Bloomberg) -- California Pizza Kitchen Inc. filed for Chapter 11 bankruptcy in Houston on Wednesday, becoming the latest restaurant chain to try to cut debt as it grapples with the pandemic.
“For many restaurants, the Covid-19 pandemic will be the greatest challenge they will ever face; for some, it may also be their last,” Chief Executive Officer James Hyatt said in a declaration filed as part of the bankruptcy.
The company, which operates more than 200 restaurants in the U.S. and abroad, has reached an agreement with a majority of its senior creditors on a restructuring plan. It’s looking to reduce its debt by $230 million, more than half of the total, and raise additional funding from existing lenders to buttress its balance sheet, according to court filings.
As the pandemic took hold in the U.S. in mid-March and California Pizza Kitchen faced restaurant closures and a drop in revenue, the company took a $30 million secured loan from a group of its first-lien lenders. That loan was “really a bridge” as the company’s balance sheet and lease foot print are “not manageable,” according to the declaration.
Unpaid Rent
The company has just $13.5 million of cash on hand and has approximately four months of unpaid rent obligations at most of its locations, including numerous default notices from its landlords and court actions over the unpaid rent, the declaration states.
https://www.msn.com/en-us/money/companies/california-pizza-kitchen-latest-chain-to-file-for-bankruptcy/ar-BB17mwcj?li=BBnbfcN
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