After closing a chunk of stores earlier this year, Sbarro Inc. is preparing to file for bankruptcy protection, maybe as early as next week, according to the Wall Street Journal.

The shopping mall pizza staple is rumored to be in talks regarding a restructuring deal that would reduce the company's nearly $365 million debt.

Sources told the WSJ that the Chapter 11 filing could come as early as Monday and would take place in New York. The 55-year-old company, based out of Melville, N.Y., runs close to 1,000 restaurants in 30 countries.

If the protection is filed as expected, operations are expected to continue without interruption.

Sbarro defaulted on a credit agreement and hired Rothschild Inc. to help it explore strategic financial options in January.

From the story:

(Sbarro's) troubles stem in part from debt taken on in 2007 to back a buyout by private-equity firm MidOcean Partners. The private-equity firm's current ownership stake is likely to be wiped out in the bankruptcy ... MidOcean also holds about 95 percent of Sbarro's second-lien debt. In the plan under discussion, MidOcean and others holding that roughly $33 million in debt would forgive it for ownership stakes in Sbarro when it emerges from bankruptcy protection. Bondholders owed about $158 million would also forgive their debt for equity ... Taken together, the restructuring moves would leave MidOcean and Ares in control of the chain.

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User Comments – Give us your opinion!
  • jackie miller
    I don't exactly know where you are located at in America, but have you ever considered moving to the south eastern part of the United States? It does get awfully hot and very, very humid from late spring until early or mid fall, and here in Charlotte, N.C., mothers such as myself hates slaving over a hot stove in the hot and humid months! If you don't have to go out of business then why do you have to do so? Have you ever considered moving out or away from the mall scene where most of the shopping mall stores are retail and not wholesale and the majority of shoppers who used to shop in those retail stores just can't afford thse high and costly prices as they have done in the past due to today's ecomony market. Please don't give up on your business as of yet, and would it be too expensive to move, and if not then at least give it a try? Please? It's never too late to try and not give up! I Pray all goes well with you, your employees, in whatever you, they wish to persue in the future. Dearestly, Jackie Miller... P.S., My number is: (704)713-6268...
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