According to reports from CNN Business, California Pizza Kitchen filed for Chapter 11 bankruptcy on Thursday. Unsurprisingly, the filing is due to the impact of COVID-19 closures on the pizza chain’s business, largely because the lingering ban on indoor dining across the country has prevented CPK from making money. On-premise service accounts for 80 percent of the restaurant’s sales.
“The unprecedented impact of COVID-19 on our operations certainly created additional challenges, but this agreement from our lenders demonstrates their commitment to CPK’s viability as an ongoing business,” CEO Jim Hyatt said in a release.
California Pizza Kitchen says that by filing, they will “reduce its long-term debt load, and quickly emerge from bankruptcy as a much stronger company.” The pizza chain has around $13 million cash on hand with nearly $47 million secured in new financing, with their financial limitations preventing them from paying rent on a majority of their locations over the last few months.
Sadly, this news really shouldn’t come as a surprise. NPC International–a franchisee for over 1,200 Pizza Hut locations in the United States–filed for bankruptcy earlier this month, explaining the move was necessitated by prolonged restaurant shutdowns due to COVID-19, just like California Pizza Kitchen,