Categories: Food Retailing / SupermarketsHeadlines

Sbarro Files for Bankruptcy Protection

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.

VMSD Staff

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