ALBUQUERQUE, N.M. -- Furrs Supermarkets here said last week it is accepting bids for the sale of the company, although it has not made a final decision on whether to sell or reorganize.
Furrs has been operating under Chapter 11 since February.
In other developments:
Furrs said it closed five of its 71 stores early last month to create enough liquidity -- an estimated $12 million, including other savings -- to keep going.
The court approved agreements that will give Furrs' two top executives and its former chief executive officer substantial consulting fees.
The chain's creditors committee was given permission to file an emergency motion seeking a Chapter 11 trustee, who would have the power to operate the business.
Furrs said it filed a motion with the U.S. Bankruptcy Court here to establish June 20 as the deadline for bids to purchase the company. However, it was not clear last week when the court would rule on the request.
If the court accepts the company's request and Furrs opts to proceed with the sale, the company said it will schedule an auction for June 25, with bidding to start with the highest initial bid.
In filing the motion to set a bidding deadline, Furrs said its management team "hopes to accelerate the company's emergence from Chapter 11 as either a reorganized company with its existing shareholders or to explore the options of a sale to another company or companies."
Even if the court sets the deadline, however, the company said it will still have the option to reject all offers and reorganize as a stand-alone company.
According to Steve Mortensen, president and chief operating officer, "We want to evaluate all options in order to preserve the value of the business and to protect the jobs of 4,900 associates that are depending on us. The filing of this motion is part of the evaluation process and will help us facilitate our reorganization in a timely manner."
He said the company has received letters of interest from potential buyers but declined to comment on reports that its former wholesaler, Dallas-based Fleming -- which gave up its 30% ownership in Furrs last summer -- is a leading contender to acquire the chain. Fleming officials declined comment.
Furrs operates 66 stores in New Mexico and west Texas. It closed five stores early last month -- two in New Mexico, including the chain's newest store that opened here last year, and three in El Paso, Texas -- as part of an effort to create liquidity to keep the chain operating.
The company said it also reduced advertising expenses, cut back on 24-hour store operations, discontinued on-line shopping programs outside of Albuquerque, reduced the use of contractors and temporary employees, and eliminated 13 staff positions. Those cuts in overhead and the store closings resulted in a reduction of $12 million in annual operating costs, the company said.
It did not indicate if it might close additional stores.
In other action, the bankruptcy court approved contracts for Furrs executives that had been approved by the company's board after it filed for Chapter 11. Under those agreements:
George Golleher, chairman, will receive $25,000 a month in consulting fees, a $125,000 signing bonus, and $1.5 million plus a percentage of the company's value at the time of a sale.
Greg Mays, vice chairman, will receive $25,000 a month in consulting fees, a $125,000 signing bonus, and $1.5 million at the time of a sale, plus a lower percentage of the company's value than Golleher gets.
Tom Dahlen, former Furrs president and CEO -- who left the company to join Fleming shortly after Chapter 11 was filed -- will receive about $130,000.
