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Pizza and pasta chain Sbarro Inc., which filed for bankruptcy protection in April, said Friday that it filed an amended reorganization plan that would allow it to emerge with less debt.
The company said it plans to exit bankruptcy protection in the fourth quarter with $110 million in debt.
The debt will be made up of $35 million in loans, and $75 million in debt from the credit facility in had prior to filing for bankruptcy protection, Sbarro said.
Also the company will convert $100 million in debt to equity when it is reorganized, and eliminate all other debt.
"The amended plan is a positive development for Sbarro that will allow the company to emerge from bankruptcy in the very near term with significantly reduced debt," Sbarro said in a statement.
Sbarro filed for bankruptcy when it was no longer able to contend with rising food costs and declining sales related to the recession.