U.K. Restaurant Chain PizzaExpress Unit Files for Chapter 15

(Bloomberg) -- A unit of British restaurant chain PizzaExpress is seeking bankruptcy protection in the U.S.

PizzaExpress Financing 2 Plc filed for Chapter 15 in the Southern District of Texas Court, according to filing.

Chapter 15 shields foreign companies from lawsuits by U.S. creditors while they reorganize in another country.

The iconic restaurant chain had been struggling even before the pandemic as changing dining trends reduced demand for its pizzas, and as Hony’s efforts to expand its business outside the U.K. stretched its balance sheet.

Covid-19 lockdown measures forced it to close most of its restaurants earlier this year, making a financial and business restructuring more urgent. The company failed to pay 20 million pounds of bond interest that came due July 31.

As part of a restructuring proposal that PizzaExpress announced in August, bondholders agreed to take over most of the business, while current owner Hony Capital will keep the Chinese operations.

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