Bashas' Restructuring Proceeds Without Proulx

ELLIOT ZWIEBACH

CHANDLER, Ariz. — The bankruptcy restructuring at Bashas' here appears on track, and is proceeding without Mike Proulx, who said he was asked to resign as president and chief operating officer, ending his 43-year career with the chain.

His ouster was “just part of the politics of the Chapter 11 reorganization process,” he told SN last week, “and I'd rather spend my energy moving forward, onward and upward.”

Proulx was succeeded on an interim basis by Darl Andersen, the company's former chief financial officer, who was brought back to Bashas' as chief restructuring officer in mid-August.

Andersen was with Bashas' for more than 25 years as controller and, subsequently, CFO. Since retiring from the company, he founded Famcor Group, a Phoenix-based real estate investment firm focused on private lending, land acquisition, and development.

Proulx's resignation occurred two months after Bashas' filed for Chapter 11 bankruptcy protection in mid-July.

Andersen declined comment last week. However, Edward N. “Trey” Basha 3d, senior vice president, legal and financial affairs, told SN Proulx's position as COO became superfluous once Andersen had been hired. “We felt Darl would be very instrumental in bringing us through these difficult times based on his knowledge of the company and his financial knowledge,” he explained.

Andersen, who retired from Bashas' in 2003, has a 17-month contract, Basha said.

The chain's bankruptcy attorneys believe the company will be able to exit Chapter 11 sometime near the end of the first quarter of 2010, he added, “and that will give us an opportunity to stabilize the company before we search for a permanent COO.”

Proulx said the reorganization process is on schedule, with expectations the company will emerge in January. “The attorneys say things are going well,” Proulx told SN.

However, while the chain has already closed 15 of its original 158 stores and has announced plans to close 14 more by mid-October, Proulx said it's possible Bashas' might opt to close three or four additional locations “that are on the bubble right now.”

Kristy Nied, a chain spokeswoman, told SN the number of closings is in flux. “We want to evaluate all stores and all leases on a number of criteria, including store location, lease terms, competitive factors, and current and future gross, and it's always possible we could close additional stores here and there,” she explained.

“However, at this point, we have not indicated any more closings than the 14 we previously announced.”

Proulx, 60, left Bashas' two weeks ago at the request of the board of directors.

He said he was not surprised by the action. “In the process of restructuring, one possibility was that I could be replaced,” he said.

“It's very common that, in the course of a financial restructuring, the top leadership of a company is changed so that when it emerges, it's not the same old company that entered Chapter 11 when it comes out.”

Proulx is not bitter or angry about that decision, he told SN, “though I am saddened because I loved my job and the associations I've had for 43 years with the Basha family and the extended family and the industry.”

Asked if he saw the handwriting on the wall when Andersen was named chief restructuring officer a month before Proulx was asked to leave, Proulx replied, “When someone is appointed to that position to help reorganize the operation, part of his job is to answer to the board and to help steer the company in the right direction, which opens up all kinds of possibilities.

“I have the highest respect for Darl, and I believe he's the right man for this tough time the company is going through.”

Proulx said he has made it clear he is available to Andersen or others at Bashas' to help. “There are some issues on the table that I have direct knowledge of, and they asked if I'd assist as those issues surface, and I said I would,” he told SN.

Proulx said he expects to take about a month off to travel and visit friends “before putting my thoughts together to see what I want to do in the next chapter of my life.

“I am still a stakeholder in Bashas' and I have the highest respect for the family — the Bashas themselves and the extended family throughout the company — and I will be on the sideline cheering them on as they emerge from bankruptcy.”

Proulx joined Bashas' in 1966 as a courtesy clerk and progressed through store-level management. Between 1981 and 1997, he supervised the chain's northern division, and was named president and chief operating officer in 2004.