Melville-based Sbarro has emerged from bankruptcy with less debt and a $35-million cash infusion from its lenders, the company announced Monday.
"Our reorganization plan eliminates more than 70 percent of our debt and provides access to $35 million in fresh capital from our new ownership group," said Nicholas McGrane, interim president and chief executive for the Italian-style quick food chain.
The company, hobbled by $368 million in debt, filed Chapter 11 bankruptcy reorganization in April, citing rising prices of flour and other raw materials, and declining traffic in malls, where most of its restaurants are located. Four months later, it submitted a restructuring plan to the bankruptcy judge that called for lenders to write down some debt in return for equity in the company and financing to keep operations afloat.
McGrane said the restructuring plan took effect Monday, making Sbarro a "more competitive company with a solid financial foundation for future growth."
The chain started as a family-based business in Brooklyn in 1956; it grew over the decades by setting up new locations in malls. It was acquired by MidOcean Partners, a Manhattan private equity firm, in 2007. It has more than 1,000 locations world wide, including at least 12 on Long Island.