California Pizza Kitchen today announced that it has Chapter 11 protection and plans to close unprofitable locations and reduce its long-term debt load with the goal of emerging from bankruptcy in three months.
Additionally, CPK has entered into a restructuring agreement with its first lien lenders, which will provide $46.8 million in new money debtor-in-possession financing, allowing for ongoing operation of CPK restaurants.
“Today’s announcement is a step toward a stronger future for California Pizza Kitchen,” said Jim Hyatt, CEO of CPK. “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.”
Already facing financial problems, the company had been looking at options to sell or restructure before the pandemic hit.