An Oct. 8 auction to sell the assets of California Pizza Kitchen Inc., which filed for Chapter 11 bankruptcy in July, was cancelled because there were no qualified bidders, according to court documents filed this week.
“This was always a potential scenario that we had planned for and are still on track to exit the Chapter 11 process on an expedited timeline. Additionally our liquidity position is strong and we are focused on our strong business momentum which includes continuing to open new locations across the globe," the company told Nation's Restaurant News in a statement released Friday.
Over the summer, the Playa Vista, Calif.-based company and 7 affiliated debtors each filed for voluntary bankruptcy protection in Bankruptcy Court for the Southern District of Texas. Sale of the company, which has been majority owned by Golden Gate Capital for nearly a decade, was among two company restructuring plans submitted to the court. The other plan was to work with lenders to reduce its $403.1 million in debt to $174 million.
Prior to filing for bankruptcy protection and before the onset of the pandemic, the struggling chain had explored a potential sale that included “outreach to sixty-one parties and a broad universe of relevant strategic and financial parties,” according to court documents.
At that time, four of 30 interested parties sent the company “indications of interest and/or proposals.”
“Ultimately, the COVID-19 pandemic severely interrupted the marketing process,” the company said in a Sept. 24 court document.
At the time of the bankruptcy filing, California Pizza Kitchen had permanently closed several underperforming locations across the country and had successfully negotiated lease concessions totaling $6.1 million over the next three years, according to court filings.
A hearing date to consider approval of the company’s bankruptcy plan is set for Oct. 29.
California Pizza Kitchen was founded in 1985 in Beverly Hills, Calif. The brand, referred to as CPK, became a wildly successful casual dining chain known for its modern take on pizza. Its legendary The Original BBQ Chicken Pizza has since been copied by rivals.
CPK grew through franchising and investments from a variety of partners over the years which included Pepsi and Buckmann, Rosser, Sherrill & Co. It was a publicly traded company for a number of years before Golden Gate Capital acquired CPK in a “take-private” transaction in 2011. At that time, CPK had about 265 restaurants.
Today, the brand has about 200 locations.
Golden Gate Capital indirectly owns more than 89% of the shares in the company, according to court documents.
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Updated: This story was edited to include a comment from CPK.