California Pizza Kitchen Has Filed for Bankruptcy
The LA-based chain is now in chapter 11 bankruptcy as a result of the pandemic.
There is an irrefutable pizza hierarchy ruled by geographics -- with New York, Chicago, and Detroit's interpretations of the cheesy, sauced up carb delicacy topping the list. But while I've got a staunch stance on that pecking order, I'm also of the firm belief that all pizza is good pizza. California-style included.
But unfortunately, for the LA-based restaurant chain that took this toppings-heavy pizza approach to the nation's masses, business has taken a serious hit as a result of the coronavirus pandemic. Outlets reported Thursday that California Pizza Kitchen has filed for chapter 11 bankruptcy.
"Today’s announcement is a step towards a stronger future for California Pizza Kitchen," CEO Jim Hyatt said in a statement following the news. "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."
And while this doesn't necessarily mean the end of CPK altogether, things aren't looking great. The company was forced to reduce corporate payroll by 35% earlier this year as locations nationwide temporarily shut down in response to the pandemic. In April, California Pizza Kitchen took a $30 million loan from outside lenders to tackle its debt, but is now seeking $46.8 million in debtor-in-possession financing, Nation's Restaurant News reports.
"The company has just $13.5 million of cash on hand and has approximately four months of unpaid rent obligations at the majority of its locations, including numerous default notices from its landlords and court actions brought by CPK’s landlords to obtain this unpaid rent," Hyatt said in the court documents, according to NRN. "The company has spent the past several months reviewing and negotiating strategic alternatives to obtain additional financing and address its capital structure and lease footprint in a holistic manner."
CPK has already permanently shuttered underperforming locations across Texas, Alabama, and Georgia.