After California Pizza Kitchen’s recent filing for Chapter 11 bankruptcy, the chain’s Santa Barbara franchise didn’t respond to the News-Press’ inquiries regarding the location’s future.
In a July 30 statement from CEO Jim Hyatt on the CPK website is any indication, however, the bankruptcy filing will not result in the Paseo Nuevo franchise closing.
“Prior to the filing, CPK closed some restaurants in the United States due to the impact of the COVID-19 pandemic and lease related challenges with our landlords. We do not have plans to close any additional restaurants at this time,” the statement read.
That said, the website’s “frequently asked questions” section states that the company is in discussions with its franchises’ landlords “to determine our go-forward plan in regards to certain other locations.”
CPK’s filing for voluntary Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Texas is meant to allow for the chain to enter into a restructuring agreement with its senior lenders that will equitize most of its long-term debt.
According to the CEO’s statement, the restructuring agreement includes a commitment for $46.8 million in new financing that will allow CPK restaurants to keep operating. The $46.8 million is debtor-in-possession financing designed to fund operating needs of companies that have filed for Chapter 11 protection.
“This proactive filing will allow us the ability to reduce our long-term debt load and emerge as a much stronger company,” it reads. “We anticipate a short stay in Chapter 11 and expect to progress on an expedited timeline. Our goal is to complete the Chapter 11 process in under three months.”
The FAQs on the CPK website regarding its restructuring stress that the chain is not going out of business, and that restaurants will keep operating in the “ordinary course.” This entails continued compliance with all local, state, and federal guidelines regarding COVID-19.