Fast-food Italian eatery Sbarro Inc. has hired bankruptcy and restructuring lawyers after defaulting on debt, said people familiar with the matter.
Sbarro—a fixture at malls and food courts around the world—has tapped law firm Kirkland & Ellis to advise it on restructuring its balance sheet, these people said. Sbarro also hired investment bank Rothschild Inc. for restructuring advice, a move disclosed in a recent regulatory filing.
Hiring advisers doesn’t necessarily mean a company will file for bankruptcy protection. Companies often bring them aboard to restructure debts outside of Chapter 11, typically through a refinancing or an exchange of existing debt for new equity. Sbarro may be able to rework its balance sheet with consent from creditors and avoid bankruptcy court, according to the people familiar with the situation. Sbarro declined to comment.