CEC Entertainment, Inc., parent company of Chuck E Cheese and Peter Piper Pizza, has filed for protection under Chapter 11 of the US Bankruptcy Code.
The group of family-entertainment-style restaurants announced the move on Thursday, explaining the decision was made in order to overcome the financial strain resulting from prolonged COVID-19 related venue closures.
The company said the move aims to position itself for long-term success.
Time and legal protections are reportedly made available to CEC through the Chapter 11 process, which the company plans to use to continue discussions with financial stakeholders, as well as critical conversations with landlords.
The goal, the company said, is to achieve a “comprehensive balance sheet restructuring that supports its re-opening and longer-term strategic plans.”
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As of June 24, 266 company-operated Chuck E Cheese and Peter Piper Pizza restaurants and arcade venues had reopened, in accordance with all guidelines from all levels of government. The goal is to maintain ongoing operations in these locations throughout the process, subject to ongoing negotiations with landlords.
This means the company hopes to continue providing dine-in, delivery, and carry-out services, hosting birthday parties during dedicated hours, and supporting fundraisers and events in the coming weeks and months.
The company said it also plans to continue opening additional locations each week.
“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 get back to the business of delivering memories, entertainment, and pizzas for another 40 years and beyond,” David McKillips, CEC’s CEO, said in a release.
“I am incredibly proud of what the CEC team has achieved over the past year as we launched the All You Can Play value gaming platform, expanded our remodel program, and found new ways to engage with families while our venues were closed. I’m confident in the strength of our team and our world-class brands and look forward to more fully implementing our strategic plan as we put these financial challenges behind us.”
The company has filed customary motions with the Bankruptcy Court intended to allow CEC to maintain operations in the ordinary course including, but not limited to, paying employees and continuing existing benefits programs, honouring guest gift cards, and upholding commitments under its franchising and licensing agreements.
CEC franchised locations operate under separate legal and financial structures, the company said, and are not included in the aforementioned filings.