Family Christian: Even Though It Means Big Loses, Vendors Want the Chain to Stay Alive
This appeared yesterday at the website MLive (Michigan Live). Click the link at the end to continue reading.
GRAND RAPIDS, MI – A lawyer for Family Christian Stores says creditors who stand to lose the most are voting overwhelmingly in favor of a bankruptcy sale that would keep the nation’s largest chain of Christian book and gift stores operating.
Voting by creditors on Family Christian’s Chapter 11 sale is scheduled to conclude on Friday, Aug. 7.
If creditors vote in favor of the plan, Family Christian’s lawyers will ask U.S. Bankruptcy Judge John Gregg to approve it at a hearing next Tuesday, Aug. 11.
The plan before creditors would sell the company to Family Christian Acquisitions, a related entity that has offered to pay between $52.4 million and $55.7 million for the company’s assets and inventory without assuming its debt.
With 266 stores in 36 states, the Grand Rapids-based chain filed for Chapter 11 bankruptcy protection from creditors in February. With 3,100 full-time and part-time employees, the company claimed assets and inventory of nearly $75 million and debts of more than $127 million.
Though creditors and vendors stand to lose millions by the sale, most were expected to vote in favor instead of liquidating the chain, which serves as a major distribution channel for their books and giftware items.
As of Thursday, Aug. 6, more than 97.6 percent consignment creditors who are owed more than $16 million had voted for the plan, representing 99.9 percent of the amount owed, according to A. Todd Almassian, a lawyer for Family Christian Stores.
Unsecured creditors who are owed $12.8 million also were voting overwhelming in favor of the plan, Almassian said. Of the unsecured creditors voting, he said 93.75 percent voted to accept the plan.
“As debtor’s attorneys, we’re always pleased to see the unsecured creditors’ support,” Almassian said. “Those are the constituents who are arguably most impacted by a bankruptcy.”
Eight classes of creditors must approve the plan by 51 percent of the votes cast and with 67 percent of the dollars represented by the votes. Almassian said he did not have final tallies for the other voting classes…