Earlier this month, a federal court approved the popular pizza chain Sbarro’s repayment plan as a part of its overall restructuring plan. The bankruptcy marks the second time in just three years that the chain has filed for bankruptcy.
According to a recent article by Reuters, Judge Martin Glenn of a New York bankruptcy court signed an order approving the chain’s plan to cut its debt by nearly 85%, from nearly $148 million to about $20 million. Sbarro management believes that by slashing its debt it will be able to remain profitable and continue to pay back its remaining lenders.
Sbarro claims that a decrease in the overall popularity of malls has led to the decrease in revenue for the pizza chain that was founded back in 1956. As a part of the company’s restructuring plan, it will close hundreds of its restaurants across the country, focusing on keeping the more profitable restaurants open for business and cutting the less profitable ones.
The company’s Chapter 11 restructuring plan had the approval of many of the creditors before the plan was even shown to the court. Under the plan, Sbarro will convert much of its debt to equity in the new company, that management is optimistic will be profitable with the money saved from cutting failing restaurants.
As an alternative to entering Chapter 11 bankruptcy, the company also flirted with the idea of auctioning off all of its assets. However, after the company could not find a bidder who wanted to pay what the company was looking for, they gave up on that option and opted for Chapter 11 instead.
The Decision to Declare Bankruptcy
The decision to declare bankruptcy is not always an easy one, whether it is for a business or personally. However, in many cases, it can be a huge relief off the shoulders of an individual to do so.
Living under constant reminders of the debt from creditors can take its toll on anyone, and can only go on for so long before becoming unsustainable. In fact, declaring bankruptcy is a good way for many people to obtain the financial freedom they have yearned for.
Are You Considering Applying for Bankruptcy
If you are considering applying for bankruptcy in Kentucky or Indiana, you should consult with a knowledgeable bankruptcy attorney as soon as possible. It may be that, although bankruptcy sounds like a drastic measure, it is right for you and will afford you the fresh start that you are seeking. While bankruptcy is not for everyone, speaking to a bankruptcy attorney is a good way to determine if it could help you in your current situation. Here at the Schwartz Bankruptcy Law Center, we understand that declaring bankruptcy can be a tough decision, but one that ultimately must be made by many people. We have years of experience helping people with their bankruptcies and would be happy to speak with you about your options. Click here, or call 866-366-3328 to schedule a free initial consultation with a Kentucky bankruptcy law attorney today.
More Blog Posts:
Federal Bankruptcy Court Goes over the Differences Between Chapter 7 and Chapter 13 Bankruptcies, Kentucky Bankruptcy Lawyers Blog, published March 31, 2014.
Federal Court in Western District of Kentucky Refuses to Change Lower Court’s Order that Debt was Dischargeable, Kentucky Bankruptcy Lawyers Blog, published March 25, 2014.