|Sbarro filed for bankruptcy protection on Monday|
NEW YORK ( TheStreet) -- Italian food restaurant chain Sbarro voluntarily filed for bankruptcy protection on Monday, saying it believes this step is "the best way to complete this process in an effective and timely manner while operating business as usual." The Melville, N.Y.-based company operates more than 1,000 locations in 42 countries, according to its Web site, and it said the restaurants would "continue to operate without interruption." As part of its restructuring, Sbarro said it's reached agreements with its key lenders to eliminate more than half of its debt.
In its filing, Sbarro estimated its number of creditors at between 5,000 and 10,000. The company put the book value of its assets at $471 million as of March 31 and its liabilities at $486.6 million. Bank of New York Mellon ( BK) is listed as Sbarro's biggest creditor with a claim of $150 million followed by Vistar Corp., a candy, snack and beverage wholesaler, at $2.3 million. Vistar is owned by Performance Food Group ( PFGC). According to the Wall Street Journal, Sbarro's proposed restructuring would cut its debt down to $173 million, a reduction of $195 million, and the company is seeking court approval of $35 million in debtor-in-possession financing from a group of its first-lien lenders who aren't included in the debt restructuring agreement. Sbarro is owned by middle-market buyout firm MidOcean Partners, which acquired the chain in January 2007 for $450 million. -- Written by Michael Baron in New York. >To contact the writer of this article, click here: Michael Baron. >To submit a news tip, send an email to: firstname.lastname@example.org