Los Angeles-based casual restaurant chain California Pizza Kitchen, better known simply as CPK, is now officially in chapter 11 bankruptcy as a result of the ongoing economic downturn fueled by the global coronavirus pandemic. While today’s announcement, made at Wall Street Journal, Nation’s Restaurant News, and elsewhere, does not mean that the company is closing its more than 250 locations permanently, though it does put the popular chain in dire straights.
The bankruptcy filing was made today in the state of Texas, and offers a glimpse of the restructuring efforts ahead meant to save the company. They include shuttering multiple “unprofitable” locations and working to reduce its considerable corporate debt — including seeking nearly $ 50 million in financing moving forward.
The company has just $ 13.5 million of cash on hand and has approximately four months of unpaid rent obligations at the majority of its locations, including numerous default notices from its landlords and court actions brought by CPK’s landlords to obtain this unpaid rent,” CEO Jim Hyatt said in the court documents. “The company has spent the past several months reviewing and negotiating strategic alternatives to obtain additional financing and address its capital structure and lease footprint in a holistic manner.
California Pizza Kitchen is far from the first national chain to experience a troubling downturn during these past six months. The Cheesecake Factory announced in late March that it would not be paying rent at its restaurant locations nationwide, and chains like Souplantation have closed entirely.
Based in Playa Vista, CPK is known for its casual locations — particularly at airports, high-traffic areas like the Hollywood and Highland shopping complex, and elsewhere — and quirky pizza toppings, thanks to founder Ed LaDou, who was the first pizza cook at Wolfgang Puck’s iconic Spago. LaDou helped create CPK’s now famous and endlessly imitated barbecue chicken pizza. CPK’s pies are now even available in frozen food grocery store aisles nationwide.
“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 has said in a statement. “Throughout this process we will continue to deliver the same innovative, California-inspired cuisine that we have been serving for over 35 years.”