Central Grocers Inc. on May 4 announced that the company and all of its subsidiaries have voluntarily elected to file for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. The company said it intends to use this court-supervised process to conduct an orderly sale of its Strack & Van Til stores and anticipates entering into a sale agreement with a stalking horse bidder in the near future.
Joliet, Illinois-based Central Grocers also is seeking to sell its distribution center in Joliet as it winds down its wholesale operations. The company said it has been cooperating with its lenders and expects to have access to sufficient liquidity to continue operating its stores and while closing down the distribution center.
Strack & Van Til stores remain open for business
All 22 Strack & Van Til, Town & Country Market and Ultra Foods stores in Indiana and Illinois are open and serving customers, Central Grocers emphasized, noting that employees are being paid as normal. Strack & Van Til intends to pay vendors in full for goods and services provided on or after the filing date, May 4, 2017.
Jeff Strack, president and CEO of Strack & Van Til, said, “Our stores are open, and we are as focused as ever on supporting our customers and providing the legendary service that we are known for. As we move through this process, our priorities, values and commitments to our customers and our communities will not change. We thank our loyal customers for their continued support, and we thank our employees for their hard work and dedication.”
Central Grocers working toward sale of stores and distribution facility
Central Grocers said it continues to work toward implementing a sale of the Strack & Van Til stores and a sale of its distribution center in Joliet and certain other assets. It is anticipated that any such sale transactions will be conducted pursuant to a court-supervised auction process under Section 363 of the U.S. Bankruptcy Code.
Ken Nemeth, president and CEO of Central Grocers, said, “In light of the increasingly difficult environment for independent supermarkets and retailers, we have been working tirelessly to achieve an outcome that is in the best interests of our stakeholders. We are using this court-supervised sale process to provide us the time and flexibility to conduct an orderly sale of the Strack & Van Til stores, while we work to sell the warehouse in Joliet and wind down our wholesale distribution operations.”
The company has filed a number of customary motions seeking court authorization to continue to support its operations during the court-supervised process, including payment of employee wages and benefits. In addition, the company intends to soon file a motion in the U.S. Bankruptcy Court for the Northern District of Illinois seeking to dismiss the involuntary bankruptcy case commenced against Central Grocers in view of its voluntary Chapter 11 filing.
Court filings and other documents related to the court-supervised proceedings are available at a website administered by the company’s claims agent, Prime Clerk, here. Additional information is available by calling the company’s Restructuring Hotline at 866-727-8489 or by emailing [email protected].
Weil, Gotshal & Manges LLP is serving as legal counsel to the company; Peter J. Solomon Co. is serving as financial advisor; and Conway MacKenzie is serving as the chief restructuring officer.