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COVID-19: Chuck E. Cheese Files For Bankruptcy After Reopening Locations

Chuck E. Cheese has filed for bankruptcy.
Chuck E. Cheese has filed for bankruptcy. Photo Credit: Wikimedia Commons

The novel coronavirus (COVID-19) crisis has claimed another victim.

Chuck E. Cheese, the popular entertainment and pizza chain that has been the place to go for children's birthday parties for 43 years, has filed for bankruptcy protection after the virus forced locations to shut their doors more than three months ago.

The bankruptcy announcement came after the company began reopening some locations as the region begins recovering from the COVID-19 outbreak.

As of Wednesday, June 24, 266 Chuck E. Cheese and Peter Piper Pizza restaurant and arcade locations had reopened in accordance with the mandates set by the Centers for Disease Control and Prevention.

The chain has seen a decline in recent years, and its parent company, CEC Entertainment Inc. hinted at the possibility of a bankruptcy filing when the pandemic first swept across the nation in mid-March.

According to the Wall Street Journal, buyers may scoop up Chuck E. Cheese, including Dave & Busters Entertainment Inc., and New York supermarket magnate John Catsimatidis, the billionaire owner of Gristedes Foods and Hellenic Times Newspaper.

CEC Entertainment said that the Company expects to use the time and legal protections made available through the Chapter 11 process to continue discussions with financial stakeholders, as well as critical conversations with its landlords, “to achieve a comprehensive balance sheet restructuring that supports its re-opening and longer-term strategic plans.”

“Subject to ongoing negotiations with its landlords, the company expects to maintain ongoing operations in these locations throughout the Chapter 11 process,” the company announced.

During the bankruptcy process, Chuck E. Cheese will continue providing dine-in, delivery, and carry-out services, hosting birthday parties during dedicated hours, and fundraisers and events.

The company also announced it plans to continue opening up additional locations each week, "steadily bringing more employees back to work, though some stores will be closing permanently."

“The Chapter 11 process will allow us to strengthen our financial structure as we recover from what has undoubtedly been the most challenging event in our company’s history and get back to the business of delivering memories, entertainment, and pizzas for another 40 years and beyond,” CEC’s CEO David McKillips said in a statement. 

“I’m confident in the strength of our team and our world-class brands and look forward to more fully implementing our strategic plan as we put these financial challenges behind us.”

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