A sign is placed in front of a Chuck E. Cheese restaurant in Newark, California.
Justin Sullivan | fake pictures
Chuck E. Cheese’s parent company, CEC Entertainment, said Thursday that it filed for Chapter 11 bankruptcy protection after local closings stemming from the coronavirus pandemic ruined its business.
The company, which is owned by private equity firm Apollo Global Management, expects to continue operations through bankruptcy and will continue to reopen locations that were temporarily closed during the pandemic. It has already reopened almost half of the company’s Chuck E. Cheese and Peter Piper Pizza locations as of Wednesday.
For the quarter ended March 29, CEC Entertainment estimated its adjusted earnings before interest, taxes, depreciation and amortization were $ 39 million to $ 43 million. Sales at the same store during the period, which is usually the busiest time of the year, fell 21.9%. In a regulatory filing in early April, the company said it was not paying the rent.
CEC Entertainment said it hopes to use Chapter 11 bankruptcy to continue discussions with financial stakeholders and owners to restructure its balance sheet to support its long-term strategy and reopening efforts. Wilmington Trust is its largest creditor.
The Wall Street Journal reported in early June that potential buyers were circling the company as it struggled to keep its business afloat. Last year, the company announced a merger with a special-purpose acquisition company that would make it public, but the deal fell apart. Apollo bought CEC Entertainment in 2014 in a $ 948 million deal that took it privately.
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