According to the New York Times, mall food court staple Sbarro has filed for Chapter 11 bankruptcy.
The pizza chain filed for bankruptcy last week. Sbarro is based out of Melville, New York. The restaurant has filed for bankruptcy twice now over the span of two years after struggling with debt and declining sales.
The company said that the bankruptcy will involve a quick financial reorganization plan and should be complete before May 7. Through the filing, Sbarro said it expects to cut its debt by more than 80 percent and said that all of its lenders support the restructuring. The company also said that it would also take offers from potential buyers.
According to the Times, Sbarro recently tried to increase sales by redoing recipes to entice diners from chains like Chipotle and Panera Bread, who use higher quality ingredients. The plan did not work, as there was a decline in mall traffic across the country.
Sbarro closed more than 180 restaurants recently and said that it expects to close about 50 more. It has 799 restaurants in 40 countries, and employs about 2,700 people. The chain was founded in Brooklyn by Gennaro and Carmela Sbarro, a married couple originally from Naples, Italy.
According to court documents, the chain has assets of $175.4 million and debts of $165.2 million. It plans to shed about $140 million in debts through the bankruptcy. Sbarro also filed for bankruptcy protection in April 2011, and emerged from Chapter 11 the following November.
Where Can I Find a Washington D.C. and Maryland Bankruptcy Attorney?
Chapter 11 bankruptcies are common for companies and organizations, as it allows them to restructure debt.
Chapter 11 bankruptcies allow businesses to remain in control of their operations while searching for investors or buyers. Individuals looking to file for bankruptcy have options in Chapter 13 and Chapter 7 filings, which stop collections, stop foreclosures and restructure debt.
Through a Chapter 7 bankruptcy, a debtor can discharge unsecured debt, like credit card debt or medical bills, which often go unpaid during financial crises. In addition, a Chapter 13 bankruptcy is an excellent option for individuals who have a certain income, but have fallen behind in payments on assets, as you can enter into a repayment plan to stop the threat of repossessions.
If your financial situation is an ongoing dilemma, contact our Washington DC and Maryland bankruptcy lawyer now for a free consultation. Visit our Facebook page, our LinkedIn page, our Google+ page and our Twitter page—we welcome followers. We are located near the Navy Memorial/Metro Station.