Sbarro wins approval of transaction procedures; auction date May 21

By Kali Hays

New York, April 8 - Sbarro LLC obtained approval of procedures for alternate restructuring transaction proposals along with an auction date and related proposal deadlines, according to a Tuesday order with the U.S. Bankruptcy Court for the Southern District of New York.

If one or more qualified bids is received, the auction is set for May 21 and preliminary indications of interest are required by April 14.

All qualified bids are due by May 15 and must provide the debtors with sufficient cash or committed financing to satisfy DIP facility claims in full and must exceed the $35 million credit bid by at least $500,000, and all subsequent bids must be made in $500,000 increments.

Each bidder must also supply a $5 million cash deposit and the company prefers bids consist of a plan sponsorship but "will consider all bid structures."

If the company does not receive any preliminary indications of interest it "will move forward with confirmation of the proposed plan without continuing the sale process" with a confirmation hearing set to take place April 22.

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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