Chuck E. Cheese on the Brink of Bankruptcy

Chuck E. Cheese on the Brink of Bankruptcy

Chuck E. Cheese on the brink of bankruptcy blogFor years, Chuck E. Cheese has been a favorite for children, especially for birthday parties. The chain features pizza and other kid-friendly fare, along with video games, prizes, and play equipment. Unfortunately, like many restaurants and other businesses, COVID-19 has decimated profits for the past few months and for the unforeseeable future. The Kid’s Birthday Party/Restaurant may have to file for bankruptcy protection.

Company Information

Chuck E. Cheese was founded in 1977 in California, but currently runs out of Texas. There are 615 Chuck E. Cheese locations worldwide, with 610 of those being in 47 of the United States. The chain is owned by the brand CEC Entertainment.

Struggles Due to the Coronavirus Pandemic

Although many restaurants have been able to continue serving takeout and delivery, Chuck E. Cheese quickly realized its clientele patronized them for their atmosphere and activities, not the pizza itself. Public video games and play equipment aren’t acceptable during the pandemic, as it would prevent an easy opportunity for the virus to spread. The chain reports that profits are down 21.9% from this time last year, and it has had to lay off 17,000 employees since March. The company also included that it was considering bankruptcy in this report. Despite all of these problems the chain announced it would be giving bonuses to three top executives to guarantee they stay with the company. If Chuck E. Cheese files bankruptcy due to the coronavirus pandemic, it will be joining the likes of big names like JC Penney, Neiman Marcus, and Pier 1 Imports. 

In an effort to recoup some losses and avoid laying off and furloughing all of its employees, the company took a unique approach to sales during the pandemic. Eagle-eyed pizza eaters on delivery services noticed that a chain called “Pasqually’s Pizza and Wings” had the same exact addresses as Chuck E. Cheese. The chain created a pseudonym based on one of mascot’s band members to sell to those too embarrassed to be seen eating Chuck E. Cheese pizza. 

Chuck E. Cheese and Chapter 11 Bankruptcy

If the chain files bankruptcy, it will more than likely utilize Chapter 11. Chapter 11 can be used by individuals and by businesses, usually those with significant assets and debts that will be particularly complicated to reorganize. Chuck E. Cheese specified that it would be a Chapter 11 filing if the company does end up filing bankruptcy.

In Chapter 11, the filer’s top creditors will form a panel to assist in reorganizing the bankruptcy debts. Along with the bankruptcy trustee assigned to the case, the panel will make sure that the reorganization is fair for the company and all of its creditors. The company can remain operating and maintain basic management decisions, big business decisions have to be approved by the panel. Alternative debt repayment methods, like ownership and stock options, may be available in a Chapter 11. 

When filing bankruptcy, most companies choose between Chapter 11 and Chapter 7 bankruptcy. Chapter 7 liquidates unsecured non-priority debts. It also provides the option to surrender financed assets that are no longer a good investment. Only the trustee will oversee the case, and creditors can appear at the 341 Meeting of Creditors but not form a panel for the case. The drawback is that the company will be forced to cease operations. All of the company’s remaining assets must be surrendered and will be sold to be distributed amongst the company’s creditors. 

Personal Bankruptcy Chapter 13 and Chapter 7

Personal bankruptcy filers also have the option to file Chapter 7 bankruptcy, along with Chapter 13. Filers will have their financial slate cleared of debts like credit cards and medical bills, but the benefits are not available to everyone. Assets must have not more equity in them than each state’s applicable exemption value. The filer must either make less than the state’s median monthly income for their number of family members, or prove their disposable monthly income is low enough through the Means Test. There are also waiting periods in between filing most chapters of bankruptcy. Those who don’t qualify for Chapter 7 will usually qualify for Chapter 13 bankruptcy.

Chapter 13 bankruptcy reorganizes debts into a payment plan that lasts 3-5 years, depending on the filer’s income relative to the state median. Some debts, like the balance on a car loan, or arrearages on child support, will be paid in full in the plan. Some unsecured debts may only receive a portion of the debt they are owed. Filers must prove they have enough income to feasibly make minimum monthly payments. There are also limits on how much debt they can have: $419,275 in unsecured debt and $1,257,850 in secured debts. 

The spread of coronavirus has impacted businesses and individuals alike. If you are struggling, you should consider how bankruptcy may be able to help you. Our Mesa Bankruptcy Office offers free consultations to help you do just that. Call today to schedule a free consultation to speak to one of our experienced bankruptcy attorneys. We offer free consultations either in office or by phone. We look forward to assisting you. 

Chapter 13 Bankruptcy


Chapter 13 Bankruptcy | Mesa Bankruptcy LawyersFor individuals with regular income, Chapter 13 is a consolidation and repayment form of bankruptcy. By providing protection from your creditors, filing Chapter 13 allows you to keep property and repay creditors via a manageable payment plan. Based on the amount of your debts, income and living expenses, an attorney at My AZ Lawyers will help you establish a repayment plan. The amount of repayment is set and paid to a Chapter 13 Trustee, who in turn distributes the money to your creditors.  Chapter 13 is an affordable way to retain property and repay creditors for those individuals who have regular income. 


Chapter 13 Bankruptcy Lawyers in Mesa, Arizona

A chapter 13 bankruptcy is available for individuals or consumers and not businesses (unless the individual is a sole proprietor, thus qualifying). Generally, an individual can retain all personal property in a Chapter 13 filing as long as the Bankruptcy Court approves the proposed repayment plan.   The sooner the case is filed, the better, in order to protect your valuable assets and accustomed lifestyle. It is best to schedule an appointment with a [cryout-button-dark url=”#”]MY AZ LAWYERS attorney[/cryout-button-dark] to discuss the plan you images (4)need to submit.


Consolidate your debts and protect your property

  • Stop harassing creditor phone calls
  • Prevent your home from going into foreclosure
  • Protect your car from repossession
  • Stop wage garnishments
  • Stop bank account levies
  • Prevent lawsuits.
  • Possibly eliminate debt


Payment and retention of a home usually is the top priority when filing and planning a Chapter 13 bankruptcy.  Sometimes referred to as a “home-saver” bankruptcy, a Chapter 13 allows you to combine your debts (secured and unsecured), devise a repayment plan, and repay some or all of your debt while protecting you from liquidation or creditor harassment.  In one monthly, reasonable payment you are able to pay on the debt.


From filing to discharge, typically a Chapter 13 could last 32 to 60 months.  Your Arizona bankruptcy attorney at My AZ Lawyers will be better able to assess the length of the case based upon your personal situation and their past experiences filing Chapter 13.  In terms of the plan, there are factors that determine your time line: amount of payment, income guidelines, and disposable income all are taken into consideration.

images (5)In order to begin the process of filing for Chapter 13 bankruptcy,  contact our Mesa bankruptcy law office to assist you with the complicated rules and procedures involved in the filing. 

  1. Contact My AZ Lawyers to schedule your [cryout-button-dark url=”#”]FREE CONSULTATION[/cryout-button-dark] with an experienced bankruptcy law attorney.  (480)833-80002.
  2. Prepare the appropriate paperwork and fill out the needed forms.  (If married, spouse fills out forms as well).  Your attorney will instruct you as to which forms you need and how to correctly prepare them.
  3. Meet with My AZ Lawyers to review your paperwork and assess your financial situation and determine if a Chapter 13 bankruptcy is in your best interest.  Your Mesa bankruptcy attorney will give you advice as to what your best options are for you in order to be debt-free.
  4.  Complete credit counseling course.  Before filing Chapter 13, you are required to complete a session on credit counseling.
  5. Approximately a month after filing your case, you and your attorney meet with creditors at a hearing called the Meeting of Creditors.  A Chapter Trustee reviews your case at this hearing.
  6.  A bankruptcy Judge approves your payment plan at a Confirmation Hearing.
  7. A second credit counseling course must be completed before receiving discharge papers.
  8. An order of discharge from the Bankruptcy Court is issued upon completion of your repayment plan and all met requirements of Chapter 13 bankruptcy law.


One key benefit to the Chapter 13 filing with a Mesa bankruptcy law office, is that the unsecured debt is addressed interest free.  There is no outrageous interest rates on credit cards as you pay your debt.  Chapter 13 is a good option for some individuals who do not qualify for chapter 7 bankruptcy but still want to achieve a debt-free future.


  • Child or Spousal support
  • Criminal fines or penalties
  • Debts incurred through fraud
  • Student loans
  • Debt due to property settlement in a divorce
  • Some kinds of taxes including real estate and income tax (these may be addressed in the payment plan, just not eliminated)
  • Debt from property damage or personal injury done willfully or maliciously


  • Prevents mortgage default
  • NO INTEREST on credit card and finance company debt
  • NO INTEREST on tax debt or penalties
  • Possible elimination of a second mortgage lien debt
  • Reduced interest rates on secured loans
  • My AZ Lawyers are experienced in filing Chapter 13 bankruptcies and can help you take advantage of this type of debt relief.

Click for additional Chapter 13 Information.






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