Chuck E. Cheese's parent company CEC Entertainment said Thursday it has filed for Chapter 11 bankruptcy protection after venue closures stemming from the coronavirus pandemic roiled its business.
The company, which is owned by private equity firm Apollo Global Management, expects to continue operations through bankruptcy and will continue to reopen locations that were temporarily shuttered during the pandemic. It has already reopened nearly half of company-owned Chuck E. Cheese and Peter Piper Pizza locations as of Wednesday.
For the quarter ended March 29, CEC Entertainment estimated its adjusted earnings before interest, taxes, depreciation and amortization was $39 million to $43 million. Same-store sales during the period, which is typically its busiest time of the year, fell 21.9%. In a regulatory filing from early April, the company said it was not paying rent.
CEC Entertainment said it expects to use the Chapter 11 bankruptcy to continue discussions with financial stakeholders and landlords to restructure its balance sheet to support its reopening efforts and long-term strategy. Wilmington Trust is its largest creditor.
The Wall Street Journal reported earlier in June that potential buyers were circling the company as it struggled to keep its business afloat. Last year, the company announced a merger with a special purpose acquisition company that would take it public, but the deal collapsed. Apollo bought CEC Entertainment in 2014 in a $948 million deal that took it private.
CEC Entertainment is the latest company to cite the pandemic as it seeks bankruptcy protection. It joins rental car company Hertz and retailers, including J.Crew, Neiman Marcus and J.C. Penney.