Court approves Sbarro plan of reorganization
Nov. 18, 2011
by Eric Schroeder
MELVILLE, N.Y. — Sbarro, Inc. said the U.S. Bankruptcy Court for the Southern District of New York has approved its plan of reorganization, paving the way for the company to emerge from Chapter 11 on Nov. 28.
“Today’s ruling marks an important milestone in our efforts to emerge from the bankruptcy process as a stronger business that will be better positioned to serve our customers,” said Nicholas McGrane, interim president and chief executive officer of Sbarro, Inc. “When we emerge from bankruptcy, our debts will have been reduced by approximately 70%, and we will have access to $35 million in fresh capital provided by our new ownership group. The support and commitment of our investors has helped us move through the restructuring process relatively quickly, and thanks to the continued efforts of our employees, our business is performing solidly as we head into our busiest period of the year.”
Based in Melville, Sbarro started as an Italian restaurant in Brooklyn, N.Y., in 1956 and has more than 1,000 company-owned and franchised restaurants. The company was acquired in 2007 by the private-equity firm MidOcean Partners, and filed for bankruptcy in April of this year, blaming reduced consumer traffic at shopping malls and increased competition at food courts. Increases in ingredient costs also led to higher costs, Sbarro said.