Can Chuck E. Cheese Survive Bankruptcy?

Chuck E. Cheese reigned as a favorite for kids birthday parties for over 40 years. But in June 2020, it filed for Chapter 11 bankruptcy and is reopening restaurants after nationwide closures in an attempt to entice families back. While indirect rivals such as Domino's and Papa John's have managed to recover some of their business, Chuck E. Cheese's struggles may be more than it can handle, as it tries to regain its footing in an industry ravaged by the pandemic.

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Can Chuck E. Cheese Survive Bankruptcy?

In June 2020, Chuck E. Cheese’s parent company CEC Entertainment 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.

[PetePuebla]

Arcades were huge, until home game consoles started advancing.

[charleskayser]

Is it just me or has CNBC been copying Company Man?

[isaachunt]

My god. Someone broke into my head and made my own vision of hell into a 'restaurant'...

[Willcaballero]

"Chuck E. Cheese" is the mouse. "Chuck E. Cheese's" is the restaurant. Get it right! - Sincerely, former employee of Chuck E. Cheese's lol

[ShutThePuck]

The business hasn't been able to recover since R Kelly stopped hosting extravagant parties at their venues.

[kevinbarry]

Never fails; once you hear private equity is involved, bankruptcy is coming.

[CaptArgo]

I guess Caillou can't go there anymore...

[alehaim]

Unlike Freddy Fazbears pizzeria, it at least didn't have murder of children

[saulgoodman]

You cannot compare Chuck E Cheese to dining out.

[easepeaseify]

Does CNBC just make videos based on what CompanyMan just covered?

[RudieObias]

Chuck E. Cheese should've started making better pizza and delivering to homes too like Domino's, Papa John's, and Pizza Hut a lot earlier than 2020.

[AmolSurve]

Chuck e cheese is like the cruise ship and Domino's and others are like the commuter boats. That's the difference 😂

[BryceBelle]

One thing I remember about this place is that usually large families full of low-lives go there. You know what I mean.

[duran]

I thought Chuck E Cheese dropped dead of overdosing 😅

[mecr]

Starting from 10:00 is all you need to know why they are in this position

[Theonlyrealdanne]

That mouse mascot has always seemed scary to me!😱🙃

[kanden]

I’ve only ever been to Chukie Chees twice in my whole life. The first time I remember it was crowded shoulder to shoulder with one kid lost. Crying. While another time it was dead and the pizza tasted bad.

[Dangic]

I am 46....and have never stepped into a Chuck E Cheese

[devinreis]

My friend works at Chuck E. Cheese's and boy, does she have a few horror stories. She said that they have to get crazy with the cleaning products the day before the health inspector comes. You know how kids can touch their mouths and their eyes, as well as have the occasional accidents from time to time; she's gotten sick quite a few times. She said it's true that parents do fight. But other than that, she can't complain.

[hilda]

I VISITED One about a month ago.. they have incredible specials for take outs. Everything inside was closed and it look very sad 😢 I tried to support all restaurants in this crisis as much as I can.