The mother or father firm of Chuck E. Cheese declared chapter on Thursday, citing retailer closures in response to stay-at-home orders throughout the pandemic because the driving issue.
CEC Entertainment, which additionally owns Peter Piper Pizza venues, stated in a information launch that it filed for Chapter 11 safety to realize a “restructuring that supports its reopening and longer-term strategic plans.”
The firm signaled no fast plans to shut any of its 612 Chuck E. Cheese places – a ceremony of passage for childhood birthdays – or its 122 Peter Piper Pizza eating places in 4 dozen states. CEC has reopened about half of its 555 company-operated venues since states started lifting coronavirus shutdown orders and stated it’s going to proceed providing dine-in, supply and carryout companies and internet hosting birthday events throughout particular hours, in addition to reopen extra places.
The restaurant and leisure industries have been hard-hit by the coronavirus shutdown. FoodFirst Global Restaurants, the mother or father of Brio Italian Mediterranean and Bravo Fresh Italian chains, filed for chapter safety in April whereas the Le Pain Quotidien cafe chain adopted swimsuit in May, in keeping with information reviews. Some eating places, together with Chuck E. Cheese and Peter Piper Pizza, have moved to carryout and curbside pickup orders. But each chains’ reliance on interplay – by means of arcade video games, ball pits and mechanical claws – made them significantly weak within the age of social distancing.
CEC, based mostly in Irving, Texas, filed for Chapter 11 safety in U.S. Bankruptcy Court for the Southern District of Texas. The firm listed greater than $1.7 billion in property and almost $2 billion in debt, as of March 29. A digital listening to for the requested emergency reduction is scheduled Friday, in keeping with the submitting.The submitting comes a couple of weeks after CEC delivered $three million in retention bonuses to its high executives, together with $1.three million for Chief Executive David McKillips. The president obtained $900,000, whereas the chief monetary officer obtained $675,000, in keeping with a June 5 submitting with the U.S. Securities and Exchange Commission.
“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,” McKillips, who assumed the highest job in January, stated within the launch. “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.”
CEC stated it’s going to proceed paying its 16,400 staff and honor visitor reward playing cards throughout the reorganization, in addition to uphold franchising and licensing agreements. Franchised places of Chuck E Cheese and Peter Piper Pizza aren’t included within the submitting, the discharge stated.
Warner Corp. opened the primary Chuck E. Cheese’s Pizza Time Theatre in San Jose, Calif., in 1977, and described it as a spot “where a kid can be a kid.” The chain was offered to ShowBiz Pizza Place, and the corporate modified its title to CEC Entertainment in 1998. It went personal when it was acquired by personal fairness agency Apollo Global Management in 2014. The firm thought-about an preliminary public providing in 2017, however that effort fell by means of.
CEC Entertainment generated $912 million in income in fiscal 2019. The firm will announce its first-quarter earnings for 2020 on Friday, which was delayed due to “noted challenges resulting from the novel coronavirus,” in keeping with an organization submitting.