The parent company of Chuck E. Cheese and Peter Piper Pizza has created a committee to explore restructuring and financing opportunities and hired two highly respected firms as its primary outside advisors, according to documents filed by CEC Entertainment with the U.S. Securities and Exchange Commission.
CEC Entertainment Chief Legal Officer Rudy Rodriguez has selected Weil Gotshal & Manges, one of the most respected corporate bankruptcy law firms in the U.S., as its legal advisor. Weil has more than 60 lawyers operating in Texas.
CEC also hired PJT Partners as its financial advisor and real estate advisors Hilco Real Estate to “assist in evaluating the viability of its fleet of venues and to secure necessary rent concessions form landlords,” according to regulatory filings.
The Dallas Business Journal reports that CEC’s restructuring committee is authorized to consider, evaluate and approve strategic alternatives, including out-of-court or in-court restructuring, to which the company might seek relief under the bankruptcy code, according to the filing.
The restructuring committee may also consider financings, refinancing, amendments, waivers, forbearances, asset sales, debt issuances, exchanges and purchases and other transactions, according to the DBJ.
None of these alternatives have been implemented at this time, the Irving-based company said.
Paul Aronzon, who appointed to CEC Entertainment’s board of directors on April 7, has been tapped to lead the board’s newly formed committee. Peter Brown and Allen Weiss also were appointed as independent directors to the restructuring committee.
In the SEC filing, CEC Entertainment said that its preliminary unaudited same venue sales for the first quarter are down 21.9 percent. The company’s adjusted EBITDA for the first quarter is estimated to be $39 million to $43 million.
Amid the COVID-19 pandemic, the company is operating 520 of its 550 Chuck E. Cheese and Peter Piper Pizza company-operated venues in a third-party delivery and take-out capacity and reducing hours of operation as on-premise dining, entertainment and arcade rooms are shuttered. The company has furloughed most of its hourly employees and about 65 percent of its support center personnel, as well. The company previously announced furloughs, reductions in spending and a strategy shift in late March.
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