Operations

Chuck E Cheese parent strikes bankruptcy plan agreement with creditors

Photo: iStock

September 8, 2020

Chuck E. Cheese parent company, CEC Entertainment Inc. has struck an agreement with two-thirds of its first-lien creditors to support a bankruptcy plan incorporating $200 million debtor-in-possession financing, according to a news release.

CEC, which owns Chuck E. Cheese and Peter Piper Pizza, is trying to emerge from Chapter 11 while continuing to serve guests. The parties to the PSA, including the company, agreed to a Chapter 11 plan premised on one of the following:

• Sale of the company's reorganized equity or substantially all of its assets.
• A credit bid for a sale of substantially all of the company's assets by its first lien lenders.
• A debt-for-equity exchange.

Under the terms of the PSA, the company will continue to solicit interest from third parties to buy the company.

"We are pleased to have reached an agreement with a substantial majority of our first lien lenders on a comprehensive balance sheet restructuring that will support our re-opening and longer-term strategic plans," David McKillips, CEC's CEO, said in the release. "This agreement and financing demonstrate our creditors' confidence in our go-forward business plan and will enable CEC to complete this financial restructuring process in a timely manner."

As of Sept. 4, 316 company-operated Chuck E. Cheese and Peter Piper Pizza restaurant and arcade venues had safely reopened in accordance with federal, state, and local guidelines. The company plans to continue opening additional locations as it is safe to do so, steadily bringing more employees back to work. CEC International and its franchisees operate a system of 568 Chuck E. Cheese and 122 Peter Piper Pizza venues, with locations in 47 states and 16 foreign countries and territories.