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Choosing bankruptcy best option for Sbarro pizza chain

The precarious financial situation of the nationwide pizza chain Sbarro is an example of how choosing bankruptcy can be a viable choice in certain situations. The restaurant has chosen this path as a way to financially restructure and escape debt through this legal process. Choosing bankruptcy can be a beneficial option for both a large business or an individual in Washington.

In this particular case, the pizza chain was unable to pay off insurmountable debt owed to various creditors. As a result, the company decided to close over 150 stores, leaving 220 still open and operating. Sbarro still employs 2,700 employees after closing the stores. After this decision, the company filed for bankruptcy as part of a specific financial restructuring plan.

The plan that is underway with the bankruptcy proceeding will allow for the company to pay off approximately $140 million before coming out of bankruptcy. A representative of the company states that 80 percent of the debt should be resolved before Sbarro emerges from its bankruptcy proceeding. Additionally, the company has secured $20 million in additional financial resources.

The bankruptcy proceeding of a large company has the same purpose as an individual going through a bankruptcy. This financial decision could be a reasonable way to protect a company or a Washington individual while allowing them to develop a plan to restructure financially and pay off debt. This is a reason that Sbarro decided to take the legal steps necessary to file for bankruptcy. Each individual financial situation should be carefully evaluated to determine if bankruptcy is the best option.

Source:, Pizza chain Sbarro files for bankruptcy, Chris Isidore, March 10, 2014

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