Sbarro, the pizza chain found in hundreds of malls across America, said Monday that it is filing for Chapter 11 bankruptcy protection. It is the second time in three years the company has had to do so.
The company, which began back in 1956, is based in Melville, New York. According to The Los Angeles Times, the company filed for bankruptcy protection in U.S. Bankruptcy Court in Manhattan. It follows a trip through bankruptcy proceedings in April 2011 and emerged in November 2011.
According to The Wall Street Journal, the company said that its lenders have agreed to trade $140 million in debt for control of the business after it is reorganized. The lenders will give Sbarro a $20 million bankruptcy loan for the restructuring.
Sbarro CEO David Karam said that the deal is proof of “the support and confidence” the lenders “have in the growth strategies.”
The bankruptcy filing follows last month’s announcement that it was closing 155 of 400 North American locations. There are still 800 Sbarros worldwide, including franchises. Still, the dwindling mall traffic has hit a business that is mostly based in malls.
image courtesy of Wikimedia Commons
