Bankrupt Chuck E. Cheese parent company wants to shred 7B tickets | Hacker News Reader

Bankrupt Chuck E. Cheese parent company wants to shred 7B tickets

news.bloomberglaw.com

37 pointsuptown66 comments

If I remember my childhood visits to Chuck E. Cheese well enough, I'm pretty sure 7B tickets could redeem approximately 12 plastic frogs and an eraser.

That’s a lot of cheating at ski-ball.

This article would be way more interesting if they were treating 7B outstanding tickets as debt and were seeking a deal with the ticketholders.

Knowing accountants, outstanding tickets are absolutely on the books as a liability.

But it sounds like they were using accounting practices where that liability was created when the tickets were manufactured, rather than when they were issued to customers.

And shredding the tickets now has removed some of that liability from their books.

Kid me (or now my six year old) would love an intermodal full of Chuck E Cheese tickets!

Adult me wonders how long they've been sneaking the ground up tickets into the "pizza" dough...

Had my sons birthday at Chuck E Cheese a few months before the pandemic.

Surprisingly the pizza wasn't too bad.

The actual party experience was really well done.

Yeah, they changed the pizza a couple years back. I wouldn’t say it is great by any stretch of the imagination, but it is improved.

It must be location-specific. I went to my first one in decades this March, and we couldn’t finish the pizza. It felt like a kid’s casino with all the lights and sounds. The party was dystopian. It really soured a good childhood memory.

Many people like the casino design. That's why casinos use it, unhealthy as it may be. Same for the pizza.

Chuck E Cheese is great for young kid parties. We've used it for our kid's 5, 6 and 7 yr old birthdays. Took all the stress out of planning, cooking, cleaning etc. The kids had a ton of fun and the prices were reasonable. The food was nothing to write home about, but kids this age aren't exactly very discriminating when you put a ton of cheese and sweets in front of them.

Thanks to COVID and the rise of food delivery, you can still get that pizza!

https://www.pasquallyspizza.com/

(psst. just don't tell the hipsters that think this is a new place.)

$2.28 million to destroy contents of

65 shipping containers,

= $35,076 per container

I wonder where the bulk of this cost comes from. Transport? Legal fees (for the petition)?

For real. I’ve got a fire pit in my backyard. I’ll knock out a container a day for a couple months for 2.28m

That's most probably illegal to do. It certainly is where I live.

In all honesty, though, you could just take them all to a landfill, right?

Yes, I'd prefer a ticket sequestration strategy

Thanks to globalization, this is no longer an issue! All you have to do is outsource it to somewhere where it is legal to burn it. Comparative advantage at work!

Isn't it fantastic to have zero ethics whatsoever?

Burn it, and spend a million on planting trees or some other form of carbon capture? Probably come out way on top in terms of both CO2 emissions and budget.

Or bury it

Of course not. It would be unethical to -not- do such a thing. You have a fiduciary duty to shareholders!

Beautiful. Not sure if serious or not (80% certain it is sarcasm, but I could be wrong), however it's a very real discussion that is not new:

https://hbr.org/2009/01/no-profits-without-ethics.html

Ya, sarcasm. Because I think if we are concerned with ethics, there are a lot more factors to take into account than just shareholder profits.

Very good, thanks. :-)

I’ll happily burn them in China for a slight fee of say 3MM?

Why is it illegal where you live? Burn ban?

I live in a city and the bylaws prohibit burning garbage. I imagine the main rationale is avoiding the smoke and the smell. I am sure there are also concerns about environmental effects and fire risk.

Combine this with that crude oil they were paying someone to take off their hands a while back and you’d be cooking with gas.

Well, cooking with oil.

A container is 2200 cubic feet. One of those a day is a cubic foot every 10 seconds for an 8 hour day. That’s some fire pit you got there.

I think it’s mostly paying the vendor who manufactured them.

The tickets were created, the vendor wants to get paid, but CEC doesn’t want the product and is in bankruptcy so they are trying to pay ~$1MM less than full price to settle with the vendor and keep the tickets from being sold to someone else.

Ah ha. If so that makes sense. Thank you.

I wonder how much they cost. Alibaba shows 1.88 for a roll of 2000 for orders of a 1000 or more. I bet you can push it down to a $1 for that volume not factoring shipping costs. Which would mean all these tickets would cost $3.5mm.

The containers sell for $5k to $8k each depending on size and condition. Maybe just sell them for $1k each and buyer has to agree to deal with what is in them?

Not if you’re “renting” them from the liner. Then depending on the port, it could be an astronomical fee per day

What I mean is, if you want to buy a shipping container, they cost $5k to $8k (used). People buy them all the time. If they were doing this in about 9 months from now, I would take some of them off their hands. They could sell them for much less to get rid of them quickly and stop paying the rent.

I hadn’t really considered how much environmental waste those tickets produced. Would reusable coins be cheaper and better for the environment?

When casinos gave up coins in the slot machines I think they did themself a disservice. The noise and excitement from dropping coins and the feeling of having a bucket full of them was an important part of the experience. I wonder if patrons of Chuck E. Cheese will care. I certainly enjoyed carrying around a bucket of tickets when I was a kid. And enjoyed seeing what other people were winning. E-points sounds less fun to me...

I think today's kids are used to the epoints/reward paradigm.

Agreed, but maybe the bias of liking the "waterfall of metal coins" is just sentimentality. I'd like to see some studies comparing physical coins to electronic rewards.

I get a sense that the vice industries (gambling, porn) are often a bit more consevative with changes and/or data driven in their decisions, so I suspect they have some interesting data on how people react to coin rewards vs. electronic rewards. I'll bet their data says the various electronic versions earn them more money

If you're a kid that has grown up with electronic devices your entire life, e-rewards are what is normal to you. This is the target audience of Chuck E. Cheese.

If you're an old fart that can remember living without electronic devices, then you'll probably have a natural affinity to a more physical type of reward. You might even be able to remember going outside to play.

Last time I was there with kids (which was a few years ago now), they had already started to migrate away from rolls of tickets for some games. Instead, you got a receipt-like printout that represented a certain number of "tickets". So, instead of getting 42 tickets, you'd have a receipt with a barcode that said "42 tickets". It's all very similar to casino slot machines with their receipts.

While this doesn't quite have the satisfaction of tubs of tickets, it is significantly easier to manage for the parents. And it makes it more possible to save tickets from multiple trips for larger prizes, should your kids possess the appreciation for delayed gratification (mine never did at that age). But I will say this -- I don't think my kids or their friends had less fun with the transition away from individual tickets.

Fun is all about manipulating expectations. No modality is inherently fun.

Today's youth are trained to appreciate digital points as yesteryear's children appreciated coins and tickets.

Are the tickets not just paper and ink though? Paper is very sustainable and recyclable as far as I'm aware.

I know the paper recycling industry is basically a myth but doesn’t anyone want a mountain of clean paper to pulp?

I tear it apart and mix it with compost instead of using peat moss (which is totally non-renewable).

I still wasn’t putting enough in and the pile smelled like a sewer until I picked up a bag of shred from the street :)

I can think of at least 50 ways to use them that cost less than 2.8 million, one of which is art.

My inner child is cringing at the thought of all those tickets going to waste.

What did you think they did with the tickets after you redeemed them. They were always destined for the landfill.

I worked at a Dave & Buster's as a tech. We were required by corporate to destroy any redeemed tickets, usually by shredding them. The shredder would go on the fritz because it was not designed to run 8hrs a day 7 days a week. When it did they would bag and bleach the tickets. Eventually I heard that they had outsourced the destruction to a mobile document shredding company.

An inner child doesn't see that far ahead... we're not talking about someone's inner adult, after all.

Wha, bleach the tickets? That sounds like way more hassle then it's worth. A strong lock on a dumpster should be enough. If someone really wanted to take them then sure, they can have the ultra cheap Chinese made stuffed animals that cost next to nothing for D&B.

I recall reports of people dumpster diving for the tickets. They were bagged separate from the foodstuffs which made dumpster diving fairly effective. One 50 gallon trashbag full of tickets was probably enough to get some of the higher end electronics stuff. That was not cheap. Though tickets were an expensive way to buy electronics vs cash at an electronics store.

Seems like they could sell entirely different tickets to a Guinness-Record-caliber bonfire. (or sell them to a pellet-stove or recycling company).

Presumably the difficulty stems from the fact that outstanding tickets in the wild can still be redeemed. There's got to be a cardboard/paper recycler that would be interested in the containers and would be willing to find an expedient way to invalidate them.

These tickets have literally no other possible use that they need to be destroyed for 2.3 million dollars? Really?

Why don't they just throw them away? It's not like the tickets have face value.

Could they not hold an auction? Surely some other company could put them to use.

Why?

Because they have the CEC name on them, and any company trying to use them in now on the hook for every CEC ticket ever issued to potentially be redeemed.

They article mentions that they have the Chuck e cheese trademark on the tickets (which I took to mean they couldn't be sold)

This headline would not be nearly as intriguing if it included "Company" after "Parent".

I was so confused by the headline until I read the article. Was there really a parent out there with 7 billion tickets? Why would they destroy them instead of redeeming them?!

Eh, I immediately understood it meant CEC's holding company, I didn't even get the "pun" until I saw this comment.

And even if they did want to destroy them, why would they need permission to do so?

Because they are going through the bankruptcy process - if you intentionally destroy assets during a bankruptcy without permission the judge can deny your bankruptcy and you might even be charged with a crime.

People with home machines might want to buy some reels for collector value.

7 billion tickets. That must be good for the plastic spider, finger trap, and a Frisbee. Well not a real Frisbee brand Frisbee. More a flying disk.

You're thinking of "flim-brim" / "flying hat"

(this joke is for the Murdoch Mysteries/Jonny Harris fans)

Ok, we'll put the company up there.

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