Bashas' to Negotiate New Reorganization

ELLIOT ZWIEBACH

CHANDLER, Ariz. — Bashas' here said it is negotiating a non-binding "term sheet" with its lenders to come up with a new, consensual plan of reorganization — a process expected to take about 30 days. A term sheet is a bullet-point document outlining the terms and conditions of a business agreement that helps legal counsel prepare a final agreement.

The company filed for Chapter 11 bankruptcy protection in June and filed a reorganization plan with the U.S. Bankruptcy Court in January, with the goal of emerging sometime this month after developing a reorganization plan that had the backing from chain management and its official committee of unsecured creditors.

Passage has reportedly been held up by banks and insurance companies in possession of bonds worth an estimated $215 million. Those lenders "have expressed an interest in working with us through the remainder of the reorganization process ... to come up with a plan that would be accepted by all three parties,” Edward N. Basha 3rd, senior vice president, Bashas’, said in a letter to employees Wednesday.

Coming up with a consensual plan, he said, "would avoid costly litigation, shorten the confirmation process and create a plan that would ensure a successful reorganization," he noted. “Creating a consensual plan is the goal of Chapter 11 reorganization, and we will be working hard over the next few weeks to reach this goal.”

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