Bondholders accused the bankrupt parent company of the Chuck E. Cheese children’s entertainment chain of trying to give too much control over its restructuring strategy to top lenders while scuttling a potentially superior alternative made by the bondholders, WSJ Pro Bankruptcy reported. In papers filed yesterday with the U.S. Bankruptcy Court in Houston, a group of unsecured bondholders led by Prudential Financial Inc. objected to the company’s request to spend its cash on hand and criticized several concessions demanded by secured lenders in exchange for their permission to use that cash. CEC Entertainment Inc., the parent of 741 Chuck E. Cheese and Peter Piper Pizza stores, filed for bankruptcy last month as the coronavirus pandemic shook its family-friendly business model. The company’s request for a final green light comes with provisions that would put the lenders in position to thwart any restructuring strategy that didn’t suit them, according to the bondholders’ objection. The bondholders said negotiations with the company shouldn’t be impeded by leverage grabs by lenders looking to take control of the business. CEC hasn’t outlined a clear path to exiting bankruptcy or proposed restructuring terms with either its lenders or bondholders.
