CHANDLER, Ariz. — Bashas' here intends to pay all secured and unsecured creditors, including vendors, in full, with interest, over a period of three to five years after it emerges from Chapter 11 bankruptcy protection, one of its bankruptcy attorneys told SN last week.
While such a process is not unusual in bankruptcies in general, it is somewhat unusual for a grocery company and was included as part of the reorganization plan at the specific request of the Basha family, Michael McGrath, a partner with the law firm of Mesch, Clark & Rothschild, Tucson, Ariz., pointed out.
McGrath said Bashas' is on schedule to emerge from bankruptcy around the end of March.
The chain submitted a preliminary plan of reorganization to the U.S. Bankruptcy Court in Phoenix on Jan. 15. If the court approves Bashas' financial disclosures at a hearing scheduled for the middle of next month, creditors and other interested parties would have 31 days to vote on whether to approve the plan, he explained.
If the reorganization plan is ultimately approved, it would call for a full payback, with interest, within three years, though the language in the preliminary reorganization plan calls for a five-year payback period.
The plan also calls for the appointment of an ombudsman as an independent third party to serve as a liaison with trade creditors to make sure they are being paid back on schedule, McGrath said.
Bashas' filed for Chapter 11 protection in mid-July and subsequently closed 29 of its 158 stores.