Belle Foods Files For Chapter 11 Bankruptcy
Belle Foods LLC has filed for Chapter 11 bankruptcy protection, according to published reports. The Birmingham, Ala.-based grocery chain has 57 stores that operate under the Belle Foods, Piggly Wiggly and Food World banners in Alabama, Florida, Georgia and Mississippi, and more than 2,850 employees.
According to the filing with the U.S. Bankruptcy Court for the Northern District of Alabama, Belle owes Southern Family Markets $28 million: $4 million for a loan and $24 million in a revolving line of credit. The grocer also owes C&S Wholesale Grocers $6 million: $5.1 million in accounts payable and $900,000 on a pension withdrawal liability note. Additionally, Belle has about $8 million in other accounts payable due.
Reasons Belle gave for the filing were that its older stores have made it harder to hold its own against new competition in its markets, the nation’s higher payroll taxes have led customers to buy fewer items, and technical issues with its accounting system resulted in losses last year.
In June 2012, Belle acquired its stores from Southern Family Markets, which in turn had taken over a number of Bruno’s and Food World locations after the bankruptcy of what was an area grocery giant for much of the 20th century. Belle has been in the process of rebannering all of the stores under its own name. In April, the grocer said it planned to cut the number of full-time employees and replace them with as many as 300 part-timers, to save costs.
The company’s creditors include Coca Cola Bottling Co. United, Frito Lay, Flowers Baking Co. and Pepsi Cola Bottling.
Belle has hired Birmingham-based Burr & Forman LLP as its legal representative for the bankruptcy proceding, and Food Partners LLC, in Washington, D.C., as its investment banker and financial adviser.