Nearly a year after Bashas’ Supermarkets filed for Chapter 11 bankruptcy, the company announced that it would still exit bankruptcy in late July, despite recent financing problems. Bashas’ may need to exit bankruptcy before all of the financing is lined up to pay off its creditors.
Bashas’ is working with investment banks to find the “take-out financing” they need to pay off nearly $200 million to banks and note holders. While the company had previously reported a favorable financing deal in the works, tough times in the credit market mean that structuring the financing may take longer than they would like.
The judge in the case has threatened to hold a trial if all parties can’t come to an agreement soon. He has scheduled a hearing for late July to confirm the details of the final plan. Since the bankruptcy filing, Bashas’ has closed 30 supermarkets, laid off 1,000 employees, renegotiated its store leases and changed its pricing to be more competitive with other Arizona food stores. The company reports that the changes have made the business stronger and that they are operating at a profit.
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