What The Future Looks Like For This Bankrupt Pizza Chain
Editor's note: A previous version of this story was published with a headline implying California Pizza Kitchen is going out of business, but to clarify, this is not the case. The company reached out to ETNT! for clarification.
California Pizza Kitchen saw its sales drop 77% by the end of March as restaurants across the country were forced to close their doors earlier this year amid the COVID-19 outbreak. The struggling pizza chain filed for Chapter 11 bankruptcy in July, joining a long list of major restaurant chains which have filed for bankruptcy during the pandemic.
An auction to sell the company's assets was canceled in early October after there were "no qualified bidders," according to Nation's Restaurant News (NRN). Before bankruptcy and the pandemic took their toll on the pizza chain, California Pizza Kitchen had already reached out to 61 parties about a potential sale, four of which sent "indications of interest and/or proposals." (This pizza chain isn't the only one with crushing news this year, here are 9 Restaurant Chains That Closed Hundreds of Locations This Summer.)
CPK told NRN that it had anticipated the possibility of the auction cancellation. "This was always a potential scenario that we had planned for and are still on track to exit the Chapter 11 process on an expedited timeline," the company said. "Additionally our liquidity position is strong, and we are focused on our strong business momentum, which includes continuing to open new locations across the globe."
But selling the company was one of two proposed restructuring options, according to FSR magazine. The other was a compromise with lenders. Nearly $50 million in new money loans were agreed to by lenders in a restructuring agreement, the outlet reported.
There is no word yet on what will happen to the more than 200 restaurant locations. At the time of the bankruptcy filing, CEO Jim Hyatt said the company expects to emerge stronger than ever.
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