Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comKey Contacts
Back
The popular Sbarro pizza chain is officially out of bankruptcy after filing for protection under Chapter 11 of the bankruptcy law last March, according to NBC News.
A judge approved the company’s reorganization plan May 19, to take effect June 2, according to the news source. Sbarro has said that it will move its company headquarters to Columbus, Ohio, in order to reduce expenses. The move will also allow it to be closer to its new Pizza Cucinova business, which will let people build their own pizzas. Sbarro will also be cutting approximately 40 jobs at its old headquarters in Melville, New York, but its other 2,700 employees nationwide will be able to keep their jobs.
According to the Wall Street Journal, Sbarro’s restructuring plan will allow lenders to exchange $148 million in debt for control of the new business. The new owners include investors Apollo Global Management, Babson Capital Management LLC and Guggenheim Investment Management LLC. Throughout the case, Sbarro looked for buyers who would make a better offer than the debt-for-equity deal offered by the company’s lenders. Unfortunately for the chain, no prospective bidders came forward, and Sbarro said that it would continue with the original restructuring plan.
In its Chapter 11 filing, Sbarro attributed its financial troubles to an “unprecedented decline in mall traffic,” according to the Journal. It closed about 180 of its 400 restaurants in North America ahead of the filing – a move that enables it to save approximately $82 million per year. Sbarro lawyer David Meyer told Judge Martin Glen that the plan achieves its goals “to deleverage the company’s capital structure, streamline operations, maximize value for all stakeholders … (and) best position the company to compete in the evolving quick-service restaurant industry.”
Unsecured creditors, like food suppliers and landlords, will have approximately $1.25 million to share under the plan, according to the news source.
If you have any questions about this post or would like to discuss your company’s creditors’ rights and bankruptcy matters , please contact me, Joel R. Glucksman at ScarinciHollenbeck.com.
- Practices: Corporate Transactions & Business, Bankruptcy & Creditors' Rights, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Section 363 Sales in Bankruptcy: What Businesses, Lenders, and Buyers Need to Know
When a company enters Chapter 11 bankruptcy, many assume the process will culminate in a lengthy reorganization plan. However, distressed businesses are increasingly being sold through a different mechanism — a sale under Section 363 of the United States Bankruptcy Code. A Section 363 sale allows a company, as a debtor-in-possession in bankruptcy, to sell […]
Author: John D. Giampolo
Zoning Laws Explained: What You Need to Know Before Buying Property
Before buying property, it is critical to determine whether local zoning laws may affect your plans. If you plan to redevelop the property, you will want to confirm that local zoning regulations permit development as intended. If acquiring property that is already developed, you must verify that the use is permitted in the underlying zoning […]
Author: Wendy Rubinstein Quiroga
Special Needs Trusts in New Jersey: Planning for Your Loved One’s Future
For parents of a child with a disability, estate planning raises concerns that go well beyond deciding who will inherit their assets. Parents may spend years making sure their child has the right care, services, and support. Eventually, they must also confront a difficult question: Who will take over when they can no longer do […]
Author: George McGowan
What Every Real Estate Investor Should Know Before Buying a Rental Property
Before buying a New Jersey rental property, an investor should verify realistic operating numbers, the property’s legal and regulatory status, lead-based paint and flood compliance, the existing leases and tenant protections, and the right ownership structure. A rental property is more than a piece of real estate; it is an operating business subject to legal, […]
Author: Donald M. Pepe
Can You Change an Irrevocable Trust in New Jersey?
In New Jersey, an irrevocable trust can sometimes be modified even though its name suggests otherwise, and one of the primary tools for doing so is a process called decanting. Whether decanting is available depends on the specific terms of the trust and the discretion given to the trustee. Key takeaways: New Jersey has no […]
Author: Marc J. Comer
How Intellectual Property Valuation Will Impact Business Transactions
Intellectual property valuation determines the monetary value of a business’s IP assets, and it drives outcomes in licensing deals, joint ventures, mergers and acquisitions, financing, and ownership disputes. The most valuable assets of a business are often the things that cannot be seen or touched: a proprietary process, a copyrighted work, brand recognition, or the […]
Author: Jay McDaniel
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.