Reuters is reporting that perhaps next week shopping mall food court favorite Sbarro may seek bankruptcy protection as it obtains over $30 Million of financing.  The financing would be available for operations while Sbarro restructures its indebtedness.

Lenders sometimes condition loaning operational money upon the filing of a Chapter 11 case and then obtaining court approval of what is know as debtor-in-possession financing.  Most of the Chapter 11 cases filed in Knoxville don’t see this type activity.  However, in the major business centers with larger and perhaps “mega-cases” debtor-in-possession financing is a common occurrence.  By requiring bankruptcy court approval a lenders obtains certainty in its security position on the collateral.

It’s easy to see that sometimes the filing of a Chapter 11 Bankruptcy case may simply be a tool for the survival and growth of your business.  Our firm has been involved as attorneys for the debtor a variety of cases including, hotels, restaurants, car washes, doctors, lawyers (but no Indian chiefs).  If your business is struggling during these difficult times don’t delay consulting with an experienced bankruptcy attorney.   Delay in developing a plan is often a key factor to an unsuccessful case.