Headlines

Sbarro Files for Bankruptcy

Pizza chain expects quick exit after cutting its debt load

Published

10 years ago

March 13, 2014

steve kaufman

Sbarro LLC (Melville, N.Y.), the chain of 400 mostly mall-based pizza restaurants, has filed for bankruptcy protection for the second time in three years.

Lenders would take control of the company under a prepackaged Chapter 11 reorganization, which, the company said, could allow a “quick exit” from bankruptcy, before May 7, 2014.

Sbarro expects to cut its debt load by more than 80 percent, and said nearly all its lenders supported its restructuring, which requires court approval.

The company said it recently closed more than 180 money-losing restaurants, and expects to close about 50 more of its remaining units. The bankruptcy will not affect the franchise-owned restaurants.

“The board and senior management team are committed to ensuring Sbarro’s future growth and success and today’s filing is a necessary step,” said ceo David Karam, who joined Sbarro in March 2013 from Wendy’s (Columbus, Ohio), where he had been president.

Sbarro previously filed for bankruptcy protection in April 2011, and emerged the following November.

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