Food Retailing / Supermarkets

Sbarro Files for Bankruptcy Protection

Mall chain operates more than 1000 pizza restaurants worldwide

Published

13 years ago

April 5, 2011

VMSD Staff

Sbarro Inc. (Melville, N.Y.) has filed for bankruptcy protection to eliminate about $200 million in debt after sales slowed and cheese costs rose, reports Bloomberg.

“We believe this plan represents the best opportunity for Sbarro to clear a path for future growth by restructuring its debt in an effective and timely manner,” Nicholas McGrane, interim president and ceo of Sbarro, said in a statement. “We are a strong company with one of the most recognizable restaurant brands in the world.”

In the filing, Sbarro listed assets of $471 million and debt of $486.6 million. The company’s bankruptcy plan, backed by creditors Ares Management LLC and MidOcean Partners, calls for converting second-lien and bond debt to equity and raising $30 million in equity through a rights offering, according to court papers.

For the quarter ended Sept. 26, 2010, Sbarro had a net loss of $5.3 million, and $12.7 million in cash.

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