The parent company of Chuck E Cheese's the once popular children-themed restaurant chain in the US has filed for Chapter 11 bankruptcy.

The company is saddled by a huge pile of debt and dismal sales because of lockdowns across the US.

CEC Entertainment, which also owns Peter Piper Pizza, said it plans to use the bankruptcy proceedings to talk to stakeholders and landlords and to restructure its balance sheet, as the outbreak ravages the entertainment and leisure industries globally. 

Already loss making, the outbreak shut the door on a rebound as sales plunged after restaurants were forced to close as lockdowns were put in place. 

Chuck E Cheese's was hit especially hard due to its children's party and games venues. 

Texas-based CEC, which was taken private by Apollo Global Management in a leveraged buyout in 2014, joins a growing list of high-profile corporate collapses due to the ongoing health crisis. 

Calling it the most challenging time in its history, the company listed assets and liabilities of $1 billion to $10 billion, according to the bankruptcy filing in the US Bankruptcy Court for the Southern District of Texas. 

CEC, which terminated a merger with blank check company Leo Holdings last year for an undisclosed reason, reported nearly $29m in losses last year, compared to losses of $20.4m in 2018. 

Chuck E Cheese's bid to boost sales through delivery apps under the name "Pasqually's Pizza & Wings" earlier this year only created more problems, as many customers thought they were ordering from a local business. 

As of yesterday, 266 Chuck E Cheese's and Peter Piper Pizza restaurant and arcade venues were re-opened in the US. 

The company expects to keep them open throughout Chapter 11 proceedings. 

As of March, CEC and its franchisees operated 612 Chuck E Cheese's and 122 Peter Piper Pizza venues, with locations in 47 US states and 16 other countries.