Mi Pueblo, the Hispanic grocery chain that filed bankruptcy last year, might need to sell its assets if its plan of reorganization is not approved Wednesday, according to local reports.
As previously reported by SN, the 21-store chain said it needs an infusion of cash in order to execute its reorganization plan, and to secure a $7.5 million letter of credit to support its workers’ compensation insurance policy. Victory Park Capital, a Chicago-based firm that invests in middle-market companies, reportedly was prepared to offer enough financing to allow the chain to erase its debts and continue operations.
According to a report in the Silicon Valley Business Journal, creditors have filed several objections to the reorganization plan, saying they have not had enough time to review it. Some of those creditors are seeking immediate repayment, the article stated.
“There simply is no available funding to satisfy these claims on the effective date, and the plan will not be confirmed under these circumstances,” Mi Pueblo said in a court filing, the newspaper reported. A Mi Pueblo spokesperson was not immediately available for comment.
The company previously said it hoped to reorganize by the end of May and emerge from bankruptcy.
Mi Pueblo filed for Chapter 11 bankruptcy in July, citing a dispute with Wells Fargo, its primary lender, which had reportedly sought to change the terms of its loans to the chain after it became concerned about the chain's debt-to-credit ratio and its forecast on revenues
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