January 11, 2011 / 1:22 AM / 8 years ago

Sbarro hires bankruptcy lawyers-WSJ

* Restaurant chain hires law firm to advise it-report

* In talks with creditors on restructuring-WSJ

* Exploring asking creditors to convert debt to equity-WSJ

NEW YORK, Jan 10 (Reuters)- Pizza chain Sbarro Inc has hired bankruptcy and restructuring lawyers after it defaulted on debt, The Wall Street Journal reported on Monday.

The Journal, citing people familiar with the matter, said the chain had hired the law firm Kirkland & Ellis LLP to advise it on restructuring its balance sheet.

Sbarro is also negotiating with creditors on ways to restructure its debt, the Journal said. It is exploring asking creditors to convert significant amounts of debt to equity, the paper said.

The pizza chain, with nearly 1,000 restaurants in 30 countries notified lenders on Jan. 3 that it expected to default under a credit agreement. It previously said it had hired Rothschild Inc to advise it on exploring strategic options. [ID:nN06151656]

MidOcean Partners, a private equity firm with offices in New York and London, bought Sbarro in 2007.

Founded in Brooklyn, New York in 1956, Sbarro expanded in the New York City region before launching in 1967 its typical restaurant format, which includes an open kitchen that allows for self-service by customers.

reporting by Liana B. Baker and Jonathan Stempel; Editing by Bernard Orr

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