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California Pizza Kitchen sought Chapter 11 bankruptcy protection on Thursday, blaming “unprecedented impact” from the COVID-19 pandemic that has devastated businesses nationwide.
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The California-based company, which operates over 200 restaurants in eight countries and U.S. territories, entered into a “restructuring support agreement” with creditors in order to lower the company’s debt by converting most of it into stock.
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As a result of the agreement, the company says it will close locations that are unprofitable, reduce its long-term debt load, and emerge from bankruptcy “as a much stronger company.”
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“The unprecedented impact of COVID-19 on our operations certainly created additional challenges, but this from our lenders demonstrates their commitment to CPK’s [Californa Pizza Kitchen] viability as an ongoing business,” Californa Pizza Kitchen CEO Jim Hyatt said.
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The announcement follows a laundry list of companies seeking relief in bankruptcy court after the pandemic hobbled operations.
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Last week, Ascena Retail Group, the parent company of Lane Bryant, Ann Taylor and Justice, announced it was seeking financial relief, joining companies including Brooks Brothers Neiman Marcus Group Inc., J.Crew Group Inc. and J.C. Penney Co.
