March 31 (Bloomberg) -- Sbarro Inc., the pizza chain owned by buyout firm MidOcean Partners, may seek bankruptcy protection after missing interest payments on its debt, said a person familiar with the process.
The filing may come as early as next week, said the person, who declined to be identified because the deliberations are private. New York-based MidOcean bought the pizza chain in 2007, according to Sbarro’s website. The company is still examining options on how to restructure debt.
Sbarro, led by interim Chief Executive Officer Nicholas McGrane, owns or franchises more than 1,000 fast-food Italian restaurants. On March 3, Sbarro obtained its third forbearance agreement with senior lenders, allowing it to keep operating even though it’s in breach of its debt covenants, according to a regulatory filing.
The company failed to make interest payments on debt due in February. Its third forbearance agreement expires April 1. The possibility of a Sbarro bankruptcy filing was reported earlier by the Wall Street Journal.
The Melville, New York-based chain hired law firm Kirkland & Ellis LLP to advise on restructuring options, two people with knowledge of the situation said in January. The company has about $350 million in bonds and loans, according to data compiled by Bloomberg.
The Sbarro family founded the company as a single Italian delicatessen more than half a century ago in Brooklyn, New York, according to its website. The family opened its first mall location about a decade later.
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