Sbarro Lender Fights Loan's Debt To Equity Switch

Law360, New York (July 25, 2011, 5:41 PM EDT) -- Column Investments S.a.r.l. launched an adversary suit against bankrupt pizza chain Sbarro Inc. in New York on Friday seeking to derail other creditors' efforts to treat its second lien loan to Sbarro as equity rather than debt.

The Luxembourg-based lender is seeking a court declaration that its March 2009 loan to Sbarro, which entered into prepackaged Chapter 11 in April, and liens related to that loan are valid and not subject to recharacterization as equity.

That declaration is necessary to remove the "cloud of doubt" the...
To view the full article, register now.