California Pizza Kitchen files for bankruptcy, to exit in less than 3 months

Casual dining restaurant chain California Pizza Kitchen has filed for bankruptcy, it shared yesterday.

Globally, casual dining chains have been struggling to survive as lockdown and the coronavirus pandemic has forced them to close restaurants.

“For many restaurants, the Covid-19 pandemic will be the greatest challenge they will ever face; for some, it may also be their last,” said, James Hyatt, CEO in a declaration filed as part of the bankruptcy.

It operates more than 200 restaurants in the US and abroad.

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The pizza chain is looking at closing unprofitable locations and reduces its long-term debt load, and emerges from bankruptcy in under three months.

The company said it has entered into a restructuring support agreement with lenders to equitize the vast majority of its long-term debt.

The agreement includes contemplating $46.8 million in debtor-in-possession financing, which will allow the company's restaurants to continue operating, and for the continued payments to vendors and employees.

"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," he added.