Sbarro stock trading procedures and DIP financing get interim approval

By Kali Hays

New York, March 12 - Sbarro, LLC's interim debtor-in-possession loan and interim stock trading procedures were approved in court on March 12, according to an attorney familiar with the case.

As previously reported, the company requested $20 million in new money DIP financing that will convert to an exit facility upon completion of its restructuring plan.

The administrative and collateral agent for the DIP financing is Cantor Fitzgerald Securities.

The DIP facility will mature six months from closing, subject to a three-month extension.

If converted, the exit facility would carry a five-year term.

Interest on the DIP loan will be either Libor plus 800 basis points with a 2% Libor floor or Base rate plus 700 bps with a 3% Base rate floor.

The transfer procedures require current or future substantial shareholders to file a declaration of their status, and, prior to any transfer, all parties must file a declaration of intent with the court.

Specifically, shareholders with more than roughly 90,000 shares of common stock, or 4.5% of outstanding common stock, are considered substantial shareholders by the company.

The company has 30 days after any transfer to object, and the objected transfer will remain ineffective until a final court order.

Any transfer that violates the procedures will be considered null and void.

A final hearing for stock trading procedures and DIP financing is scheduled for April 7.

Sbarro, a Melville, N.Y.-based quick-service Italian restaurant chain, filed for bankruptcy on March 10. The Chapter 11 case number is 14-10557.

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