In an open letter to employees and customers on July 30, California Pizza Kitchen
(CPK) CEO Jim Hyatt announced the company has filed voluntary Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Texas.
The pizza chain has now entered into a restructuring support agreement with senior lenders that will equitize most of its long-term debt. The agreement includes a commitment for $46.8 million in new financing which will enable ongoing operation of the California Pizza Kitchen’s restaurants. The company hopes within three months the filing will reduce long-term debt.
California Pizza Kitchen will still be open for takeout, delivery, third party, and select dining room and patio locations. However, the company has said it would close unprofitable locations. It is not yet known how many of CPK’s 200 global restaurants will be affected. In a filing, CPK revealed that on-premise dining makes up 80 percent of its sales, making the chain especially susceptible to the forced closure orders resulting from the COVID-19 pandemic. Revenues are down 40 percent compared to the same period as 2019, the company said.