Sbarro, Inc., and its domestic subsidiaries , (the “Company”), announced today that it has consensually terminated its prepetition plan support agreement and equity commitment agreement with Ares and MidOcean in order to explore other strategic alternatives, including discussions with a qualified bidder who has expressed preliminary interest in acquiring the company. In addition, the Company continues to negotiate with its prepetition creditors to pursue a standalone plan of reorganization.
Today’s announcement follows discussions with key stakeholders of the Company, including Ares, MidOcean and the first lien steering committee, who each support the Company’s decision to pursue multiple avenues to maximize value and not to file a plan of reorganization or seek approval of the equity commitment agreement at this juncture.
Nicholas McGrane, Interim President and Chief Executive Officer of Sbarro, Inc., noted: “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. 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.” McGrane added: “As we move through this process, Sbarro’s restaurants will continue to operate in the normal course.”
Sbarro filed for bankruptcy protection on April 4, 2011. The chapter 11 cases are pending before the Honorable Shelley C. Chapman in the United States Bankruptcy Court for the Southern District of New York under case number 11-11527 (SCC).