CLEVELAND, Ohio — California Pizza Kitchen stated it should shut an unspecified variety of eating places after submitting Chapter 11 chapter Thursday.
In a release, the corporate, which operates greater than 200 eating places, stated the submitting was essential “to cut back its long-term debt load and shortly emerge from chapter as a a lot stronger firm.”
The informal eating chain stated it will shut eating places which can be “unprofitable,” however didn’t determine these areas. The firm operates one restaurant in Northeast Ohio at Legacy Village in Lyndhurst.
“At present’s announcement is a step in the direction of a stronger future for California Pizza Kitchen,” stated CEO Jim Hyatt. “The unprecedented impression of COVID-19 on our operations definitely created further challenges, however this settlement from our lenders demonstrates their dedication to CPK’s viability as an ongoing enterprise.”
In courtroom paperwork, the restaurant chain stated the coronavirus pandemic delivered a “vital blow” to its backside line as a result of in-restaurant eating accounted for 78 % of gross sales previous to the shutdown. The corporate secured a $30 million mortgage, lower payroll by 35% and quickly closed 46 areas to maintain the enterprise afloat because it pivoted to takeout, supply and the sale of meal kits.
Gross sales, nonetheless, are nonetheless down 40 % and the corporate now has simply $13.5 million money readily available and is 4 months behind hire on the majority of its areas.
Underneath phrases within the submitting, the corporate will obtain $46.9 million in new financing to maintain eating places working and paying workers and distributors. The restructuring plan requires California Pizza Kitchen to cut back its debt from $403 million to $174 million and emerge from chapter inside 85 days.
“All through this course of we’ll proceed to ship the identical modern, California-inspired delicacies that we have now been serving for over 35 years,” Hyatt stated.