A sign is posted in front of a Chuck E. Cheese restaurant in Newark, California.
Justin Sullivan | Getty Images
Chuck E. Cheese’s parent company CEC Entertainment said Thursday that it filed for Chapter 11 bankruptcy 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 throughout 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 Piped Piper locations, as of Wednesday.
For the quarter ended March 29, CEC Entertainment estimated its adjusted earnings before interest, taxes, depreciation and amortization was between $39 million and $43 million. Same-store sales during that period, which is typically its busiest time of the year, fell 21.9%. In a regulatory filing from early April, the company said that it was not paying rent.
CEC Entertainment said that 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.