Chuck E. Cheese, the popular food and games chain, is speaking with investors about ways to raise money to avoid your bankruptcy filing, The Wall Street Journal reports.
The chain has also approached lenders in the past few weeks to feel out possible interest in a $200 million loan to assist purchase a remain in bankruptcy, a resource said, reported by WSJ.
Chuck E. Cheese is facing down a $1.9 million quarterly payment on loans, due after June. Lenders and bond-holders happen to be working on an offer to assist the company stay out of bankruptcy.
As the coronavirus pandemic unfolds across America, with the country moving toward reopening after months of shutdowns that roiled the economy, many Chuck E. Cheese locations haven't yet reopened.
The company, before the pandemic, was growing, reporting a 2.7 percent in-store sales rise in 2022 after years of declining or flat sales.
And even though some chain's locations began to reopen recently, the company continues to be burning cash with the majority still closed, and it has to now consider raising more capital. The organization has additionally come into danger of breaching loan requirements to achieve some earning targets this fall, based on Moody's Investors Service.
On Friday, Chuck E. Cheese said hello would be paying prebankruptcy retention bonuses of nearly $3 million to 3 top executives, with $1.3 million going toward Leader David McKillips. Those bonuses have become common during the coronavirus pandemic as retention bonuses for insiders along with other top officials are illegal under bankruptcy law, WSJ reports.
The chain continues to be utilizing temperature checks at the front doors since reopening to ensure that nobody carrying herpes could potentially infect customers.
Chuck E. Cheese was exploring the idea of going public this past year, after being taken private in 2022 by owner Apollo Global Management. But when the pandemic hit, Chuck E. Cheese shuttered its restaurants, ceased paying rent and furloughed a large amount of staff, WSJ reports.
