Chuck E. Cheese’s parent company CEC Entertainment said Thursday that it is filing for Chapter 11 bankruptcy protection, citing the “financial strain” of massive restaurant closings due to the coronavirus pandemic. The company said it expects to continue operating many of the family-oriented restaurants, which include the Peter Piper Pizza chain, as it is being reorganized under the supervision of a federal bankruptcy court.
CEC said it had reopened 266 company-operated Chuck E. Cheese and Peter Piper Pizza restaurants as of June 24, representing about half of its 555 company-owned restaurants. Those restaurants will continue to offer dining, delivery and take-out services, as well as hosting birthday parties, while additional locations will continue to open, the statement said.
Bankruptcy filings are on the rise, with 722 companies seeking bankruptcy protection in the US USA in May, an increase of 48% compared to the same period of the previous year. Trade restrictions that closed many businesses during the coronavirus outbreak pushed some companies into insolvency. The CEC of Chuck E. Cheese, Sr., stated that “the prolonged closure of premises related to COVID-19” affected its operations.
“The Chapter 11 process will allow us to strengthen our financial structure as we recover from what has undoubtedly been the most challenging event in our company’s history and we will return to the business of delivering souvenirs, entertainment and pizza for another 40 years and plus”. David McKillips, executive director of CEC, said in the statement.
There are another 186 franchise-owned restaurants, which CEC says operate under separate legal and financial structures and are not included in bankruptcy.