Los Angeles-based informal restaurant chain California Pizza Kitchen, better known simply as CPK, is now officially in Chapter 11 bankruptcy as a result of the ongoing economic recession fueled by the global coronavirus pandemic. While today’s announcement, made in Wall street journal, Nation’s Restaurant News, and elsewhere, doesn’t mean the company is closing its more than 250 locations permanently, although it does put the popular chain in serious trouble.
The bankruptcy declaration was made today in the state of Texas and offers an idea of the restructuring efforts that will be carried out to save the company. They include closing multiple “unprofitable” locations and working to reduce your sizeable corporate debt, including seeking nearly $ 50 million in future financing.
Per Nation’s Restaurant News:
The company has only $ 13.5 million in cash on hand and has approximately four months of unpaid rental obligations in most of its locations, including numerous notices of default by its owners and legal actions initiated by CPK owners to obtain this rent unpaid, ”CEO Jim Hyatt said in court documents. “The company has spent the past few months reviewing and negotiating strategic alternatives to obtain additional financing and address its capital structure and leasing footprint in a comprehensive manner.
California Pizza Kitchen is far from the first national chain to experience a worrying slowdown in the past six months. The Cheesecake Factory announced in late March that it would not pay rent at its restaurants across the country, and chains like Souplantation have closed entirely.
Based in Playa Vista, CPK is known for its informal locations, particularly in airports, high-traffic areas like the Hollywood and Highland shopping complex, and elsewhere, and quirky pizza toppings, thanks to founder Ed LaDou, who was the first pizza cook in Wolfgang Puck’s iconic Spago. LaDou helped create CPK’s roast chicken pizza, now famous and endlessly imitated. CPK cakes are now even available in the aisles of frozen grocery stores across the country.
“The unprecedented impact of COVID-19 on our operations certainly created additional challenges, but this agreement by our lenders demonstrates their commitment to the viability of CPK as an ongoing business,” CEO Jim Hyatt said in a statement. “Throughout this process, we will continue to offer the same innovative California-inspired cuisine that we have been serving for over 35 years.”
