MCCaysville GA – March 11, 2014 (hospitalitybusinessnews.com) With a large number of it’s stores in Shopping Malls, which have seen a large drop in traffic, Sbarro has seen its sale languish as others have been riding high as the economy slowly picks ups. According to the New York Times, Sbarro filed for bankruptcy protection for a second time on Monday.
According to the report it is a “prepackaged” filing which will give debt holders control of the company, cut debt by 80%, and see a quick exit back into the real world by mid May. The company said it recently closed more than 180 money-losing restaurants, and expected to close about 50 more. It said it now had 799 restaurants in more than 40 countries, employing about 2,700 people. Sbarro said the bankruptcy did not affect the 582 restaurants owned by franchisees.
The filing stated that Sbarro and 33 affiliates filed for protection from creditors with the federal bankruptcy court in Manhattan. The company reported assets of $175.4 million and liabilities of $165.2 million. It plans to shed $140 million of secured debt in the reorganization. Advisers include Moelis & Company, Loughlin Management and the law firm Kirkland & Ellis.