Eagle Food Centers, which owns and operates 59 supermarkets in Illinois and Iowa, has announced that it will commence a sale of almost all of the assets of its operating units through competitive bidding procedures under Section 363 of the US Bankruptcy Code.
“Since the company’s voluntary Chapter 11 filing in April, management and the Board of Directors have been exploring various alternatives that would result in maximum recovery to our creditors and, at the same time, have the least impact on the jobs of our employees,” said chairman, CEO and president Robert J. Kelly.
“After careful consideration, it was determined that an evaluation of a sale of the company’s stores, either individually or as a whole, may yield the optimum results on behalf of Eagle Foods‘ employees, customers, suppliers and creditors.”
At the same time, the company said it would continue to develop a stand-alone plan of reorganisation to maintain and operate Eagle Food stores. Kelly said that as part of its plan to concentrate resources on operations with the strongest potential for future growth, Eagle Food Centers would close nine Eagle Food stores by the end of the company’s fiscal second quarter.
A court hearing has been scheduled for 27 June to consider the company’s proposed bidding procedures and the store-closing request.