After filing for Chapter 11 bankruptcy protection in June, CEC Entertainment CEO David McKillips has been leading a debt restructuring effort to support the company’s reorganization expenses and business operations. (CEC is the parent company of Chuck E. Cheese and Peter Piper Pizza). On Sept. 4, the company announced they’d secured a “plan support agreement” from consenting creditors holding greater than two-thirds in principal amount of outstanding obligations, plus a commitment for $200 million in debtor-in-possession financing from its first-lien lenders. (The announcement can be found here.)
“We are pleased to have reached agreement with a substantial majority of our first lien lenders on a comprehensive balance sheet restructuring that will support our reopening and longer-term strategic plans,” said McKillips. “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.”
CEC’s restructuring during Chapter 11, reported Nation’s Restaurant News, “is based on a plan to sell its reorganized equity or all of its assets, a sale of all of its assets to lenders or a debt for equity exchange. CEC Entertainment is continuing to consider interest from third parties for the sale of the company, though no official announcement has been made yet.”
As of Sept. 4, 316 company-owned Chuck E. Cheese and Peter Piper Pizza restaurant and arcade venues had reopened in accordance with CDC, federal, state and local guidelines with more locations looking to do the same. To learn more about the financing package, visit cecentertainment.gcs-web.com/investor-overview. (PS: The bar date for reception of general claims has been set at Oct.1, 2020. The Governmental bar date is Dec. 22, 2020. Claim forms have been mailed to creditors.)