JACKSONVILLE, Fla. — Southeastern Grocers filed for Chapter 11 bankruptcy in Delaware on March 27 to implement a pre-packaged reorganization plan.
Earlier in the month, the company announced that it had reached agreement with 80% of its creditors and its private equity sponsor on a prepackaged restructuring that would permit it to operate 582 Winn-Dixie, BI-LO, Harveys and Fresco y Más stores in seven states in the Southeast and close 94 stores while it seeks a new route to long-term viability.
Anthony Hucker, president and chief executive officer of Southeastern Grocers, characterized the bankruptcy filing as “the next step in the implementation of our financial restructuring plan.”
Added Hucker: “We are extremely pleased that this process continues to proceed quickly and as planned. With each key milestone reached, we move closer to emerging and making Southeastern Grocers into a true success story for our associates, our customers and the communities we serve.”
Southeastern Grocers is one of the largest conventional supermarket companies in the United States, operating grocery stores, liquor stores and in-store pharmacies in Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina and South Carolina.
The company said the restructuring would lower debt levels by more than $500 million, thereby reducing interest expenses and allowing it to allocate funds to add new stores and remodel existing ones.
According to its Chapter 11 petition, the retailer had between 50,000 and 100,000 unsecured creditors. Wells Fargo & Co., the trustee for $522 million in unsecured notes, is listed as the largest creditor.
Other large creditors include C&S Wholesale Grocers, the nation’s largest grocery wholesale supply company, and Cardinal Health Inc., a distributor of pharmaceuticals and other medical supplies and equipment.
Southeastern Grocers said it had filed various customary motions to obtain the court approval needed to continue to support its business operations during the restructuring process, including the continued payment of employee wages and benefits without interruption. The company said it expects its motions to be granted.
Meanwhile, it has agreed to sell three Winn-Dixie locations in Alabama to Mitchell Grocery Corp., as well as three BI-LO stores in South Carolina and three Harvey’s Supermarkets in Georgia to three independent Piggly Wiggly store owners.