Sbarro Inc has proposed a restructuring plan that would give ownership of the chain to senior lenders. The pizza restaurant chain entered bankruptcy in early 2011.
The plan would reduce its debt by 73 percent, or $295 million, and convert senior debt to equity, Sbarro said in a statement. The plan requires court approval to be put into action.
“The plan gives us a clear path to emerge from the bankruptcy process with significantly reduced debt and increased financial flexibility and liquidity,” Nicholas McGrane, interim president and chief executive officer, said in the statement.
Sbarro owns and franchises over 1,000 fast-food Italian restaurants around the world. The Sbarro family started out with a single Italian delicatessen over 50 years ago in Brooklyn, New York. The first mall location opened about a decade later.
The company filed for bankruptcy in April, blaming reduced customer traffic at malls and increased competition from food courts. Most of the stores are located in indoor malls.
Sbarro said it intends to hold an auction to allow bidders to make rival offers. The company said it is in talks “with a number of interested parties” that may submit competing proposals.
Bankruptcy is an excellent tool for businesses and individuals alike to regain control of their financial situation. The process enables people to take a financial load off their shoulders and move on with their life. If bankruptcy looks like it’s in your sights, do it now. The sooner you reach discharge, the sooner you can rebuild your financial life.
Benjamin Brand Services – Chicago bankruptcy attorney