BIRMINGHAM, Ala. — Belle Foods, which filed for bankruptcy protection earlier this month, said Wednesday that it would look to sell all of its remaining 44 stores as part of an agreement with its largest creditor, supplier C&S Wholesale Grocers.
Belle, which operated 57 stores when it filed for Chapter 11 protection July 1, previously received approval to close 13 stores, and last week sought approval to sell another 12. The motion to sell all of its stores comes as part of a financing package with C&S intended to repay Belle’s $ 33.3 million debt with C&S and provide enough working capital to continue to operate stores through Oct. 4.
If approved by the court, a chief restructuring officer would be installed by C&S to maximize the value of the stores. Belle owners Bill White and Jeff White said they would stay to assist with the CRO’s transition. They also retain a right to submit bids to repurchase stores.
“We’re in talks with other wholesalers who could back us, and hopefully we can come out with a group of stores,” Bill White told SN Wednesday. “That seems to be the best path, not only for us, but for getting the best value out of the estate.”
Belle in court papers said it reconsidered initial plans to operate the stores while in Chapter 11 when it received unexpected interest in some of the 13 stores marked for closure on July 5. Belle has since paused going-out-of-business sales at “five or six” of those stores that attracted interest and is currently working to sell those units as on-going concerns to individual bidders, White said.
“The demand for the closing stores, which were underperforming relative to Belle Foods’ other stores, caused the company to reconsider its original plan,” Belle said in a document filed in U.S. Bankruptcy Court. “Belle Foods now believes that marketing all of its stores for sale presents the best opportunity to maximize the value of its assets for the benefit of its estate and creditors.”
Belle filed a motion seeking approval of the sale of 12 stores last week in response to a “stalking horse” bid for those assets from wholesaler Associated Wholesale Grocers. That bid included 10 stores in and around Mobile, Ala., as well as stores in Columbus, Miss., and Meridian, Miss. AWG has a new distribution facility in Pearl River, La.
The financing package calls for up to $ 34.8 million, according to court documents. Of that amount $ 33.3 million would be used to refinance existing obligations to C&S; and $ 1.5 million will be available as new financing. Belle said it required the financing to have sufficient funds to operate while in Chapter 11.