Grocery supplier files Chapter 11 bankruptcy

| Wednesday, April 09, 2003

Fleming Cos. and its subsidiaries filed Chapter 11 bankruptcy April 1 in the U.S. Bankruptcy Court in Wilmington, DE, the company announced in a release the same day.

The grocery store supplier lost an estimated $4.5 million in business from Kmart after the bankrupt department store chain ended a major supply agreement with Fleming in January. Kmart accounted for 20 percent of Fleming's business.

"Against this backdrop, it became clear that filing for Chapter 11 was the only choice that would allow us to continue operating as a going concern, with renewed trade credit support, while negotiating with our creditors toward an adjustment in our debt level that would be more consistent with our operations, assets and current business model,” Peter Willmott, Fleming's interim president and chief executive officer, said in the release.

Fleming says it intends to use the Chapter 11 process to restructure its business operations and finances; to establish an improved capital and cost structure; and to position itself for long-term success upon emergence from Chapter 11.

Fleming is open and conducting business at all of its facilities. The company is negotiating with its lenders on the terms of debtor-in-possession financing and expects to announce further progress shortly. Additionally, the company said it continued to receive supplies and service its customers.

Fleming has filed a variety of "first day motions" to support its associates, customers and vendors. In addition to the motions cited above, the company is seeking court approvals for continuation of payments for employee health and other benefits; cash management programs; and for legal, financial and other professionals to support the company's reorganization.

Vendors who provided goods or services to Fleming or its subsidiaries before the bankruptcy filing may have pre-petition claims, which will be frozen pending court authorization of payment or consummation of a reorganization plan.

--by Rene Tankersley, feature editor

Rene Tankersley may be reached at renet@landlinemag.com.

Comments