Belle Foods Gets OK to Sell 7 Stores
Financially troubled grocery chain Belle Foods LLC has received court approval to sell seven grocery stores, and the Birmingham, Ala.-based company will auction off its remaining 44 stores on Sept. 24.
Belle Foods, which filed for Chapter 11 bankruptcy protection last month, originally intended to shutter the seven stores, located in Alabama, Florida and Georgia, on Aug. 8, as part of a wider group of closures, the Birmingham Business Journal reported. It was revealed in court that the buyer of the Decatur, Ala., Food World store, Hometown Market of Morgan County Inc., plans to liquidate its contents and not keep it as a grocery store, but the rest of the stores will apparently continue to operate under new banners and ownership.
Autry Greer & Sons, operator of Greer’s Market and Cash Saver grocery stores in Alabama, Florida and Mississippi, has offered to purchase the Mobile, Ala., Food World for $455,000, as well as a Pensacola, Fla., Food World for $100,000. Hometown Market of Morgan County has offered $100,000 for the Decatur store, which is located down the street from a store it already operates.
Additionally, Mary Esther Foods LLC is paying $250,000 for the Food World in Mary Esther, Fla.; Malloy Grocery is paying $150,000 for another Pensacola Food World; Fisher Douglas LLC is paying $150,000 for a third Pensacola Food World; and CMM Properties Inc. is paying $100,000 for the Piggly Wiggly in Tifton, Ga. According to court filings cited by the Birmingham News, Belle Foods aims to have all seven stores sold by Aug. 15.
Food World stores in Homewood, Hueytown, Florence and Gadsden, Ala., and Pensacola and Niceville that didn’t find buyers closed their doors Aug. 8.
The Retail, Wholesale & Department Store Union-Mid-South Council, which represents 1,250 hourly Belle Foods employees, raised an objection to the sale, but the issue was resolved at the court hearing, enabling the order to go forward.
Belle Foods owes its largest creditor, C&S Grocers, in Keene, N.H., and that company's Birmingham-based subsidiary, Southern Family Markets, $34 million: $4 million for a loan, $24 million in a revolving line of credit, $5.1 million in accounts payable and $900,000 on a pension withdrawal liability note.
At a subsequent hearing, Judge Jack Caddell of the U.S.Bankruptcy Court of the Northern District of Alabama said he was willing to approve a new debtor-in-possession (DIP) agreement between C&S and Belle Foods, as well as the bidding process both parties want to use to sell the 44 remaining stores.
The latest version of the agreement refinances Belle Foods' debt and gives the company $5 million in new operating capital. PG reported on the evolving DIP agreement last month. Both the DIP agreement and the auction require court approval to proceed.