CEC Entertainment, the Irving-based parent company of Chuck E. Cheese and Peter Piper Pizza, is in talks with lenders to raise money to avoid bankruptcy, according to a Wall Street Journal report that cited people familiar in the matter.
The restaurant and children’s entertainment chain faces a $2 million quarterly loan payment at the end of the month and is about $1 billion in debt.
To keep its management team intact, the company is awarding retention pay to 28 employees, according to a regulatory filing last week. CEO David McKillips, President J. Roger Cardinale and CFO James Howell will receive nearly $3 million combined, the filing said.
The payments are for 12 months or 30 days following a restructuring, whichever is earlier. Cardinale’s agreement is until Sept. 30.
The company reported nearly $1 billion in debt on its balance sheet at the end of last year. It approached lenders in recent weeks to gauge their interest in providing a $200 million loan to finance it through a bankruptcy reorganization, The Wall Street Journal reported. Lenders and bondholders are seeking to put together a deal while CEC reopens locations closed during the COVID-19 shutdown.
CEC has not publicly disclosed any restructuring or bankruptcy plan.
The company was founded as ShowBiz Pizza Place but changed its name in 1998. It has more than 600 Chuck E. Cheese and 120 Peter Piper Pizza locations in 47 states and 16 countries and territories. There are 66 locations in Texas.
Its 2019 revenue topped $900 million, with food and beverage sales accounting for almost 44% of that, the company said in its annual report.
