Chuck E. Cheese, Peter Piper Pizza File For Bankruptcy: What Does It Mean For The Restaurants?

CEC Entertainment, the parent company of restaurant chains Chuck E. Cheese and Peter Piper Pizza, has filed for Chapter 11 bankruptcy protection under financial strain from the coronavirus pandemic.

CEC was forced to close all of its locations in March as COVID-19 took hold of the restaurant industry. The company furloughed the majority of its employees a month later but has reopened the majority of its Chuck E. Cheese and Peter Piper Pizza dining rooms as state and local guidelines allow.

The company is also bringing back furloughed employees as locations reopen each week.

Chapter 11 reorganization will allow CEC to negotiate lease terms with its landlords, continue discussions with its financial stakeholders, and strengthen its balance sheet.

Through the bankruptcy filing, CEC expects that it will continue to maintain its operations, including paying employees, offering benefits, honoring customer gift cards, and upholding its commitments to franchisees and licensing partners.

Both Chuck E. Cheese and Peter Piper Pizza locations will continue to operate through the bankruptcy filing, offering dine-in, delivery, and carry-out services. The restaurants will also continue to host birthday parties and support fundraisers and events over the coming months, the company said.

“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,” David McKillips, CEO at CEC Entertainment, said in a statement.

“I am incredibly proud of what the CEC team has achieved over the past year as we launched the All You Can Play value gaming platform, expanded our remodel program and found new ways to engage with families while our venues were closed. 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,” he added.

CEC has tapped Weil, Gotshal & Manges LLP to serve as its legal counsel while PJT is its financial advisor. FTI Consulting will serve as CEC’s restructuring advisor, and Hilco Real Estate will work as the company’s real estate consultant.

CEC’s U.S. and international franchised restaurants are not a part of the bankruptcy filing, the company said.