Sbarro to seek alternatives to bankruptcy plan
May 20, 2011
by Eric Schroeder
MELVILLE, N.Y. — Sbarro, Inc., the quick-service restaurant concept that filed for Chapter 11 bankruptcy protection on April 4 as it worked to restructure, has terminated its prepetition plan support agreement and equity commitment agreement with Ares and MidOcean. Instead Sbarro is exploring other strategic alternatives, including discussions with a qualified bidder who has expressed interest in buying the company.
“We believe it is in the best interest of all stakeholders for the company to dedicate its resources to exploring all available value maximizing alternatives,” said Nicholas McGrane, interim president and chief executive officer. “We greatly appreciate the initial and continued interest of Ares and MidOcean in the company, as well as the continued participation of the first lien lenders and the new interest from a sophisticated bidder.”
Founded in 1956 as an Italian grocery store in Brooklyn, N.Y., Sbarro became a neighborhood favorite for its fresh food and authentic Italian fare, including homemade mozzarella, imported cheese, and sausage and salami. In 1967, Sbarro opened its first mall-based restaurant in Brooklyn’s Kings Plaza Shopping Center, and since 1967, the King’s Plaza business model has been replicated more than 1,000 times.
MidOcean Partners, a private equity firm with offices in New York and London, acquired Sbarro in early 2007.