JACKSON, Miss. -- Jitney-Jungle Stores of America here said last week it is awaiting a final ruling by a U.S. Bankruptcy Court judge on a new trade credit plan for vendors. The plan has already been endorsed by the company's creditors committee, financial lenders, management and the National Food Manufacturers Credit Association.
The plan, which received interim approval at a Jan. 14 hearing, is scheduled for a final ruling Feb. 2.
Jitney has been operating as a debtor-in-possession since Oct. 12, the date it filed for Chapter 11 protection.
According to Ron Johnson, Jitney chairman and chief executive officer, "Without question, court approval of this plan is a key landmark, not just for the judge but also because all parties involved have agreed to it.
"The challenge for us has been how to extend credit that the vendor community would support. Since the filing, we have been on a cash-in-advance or cash-on-delivery payment system with a lot of vendors, and that's been difficult to handle and manage -- for us and for the vendors -- because it operates outside the normal accounting and sales parameters.
"So getting back on normal terms with vendors that sign up would be a big plus for us and them."
Johnson also said Jitney still plans to follow through on its prefiling plan to divest 40 to 50 stores. "Our focus right now is on doing that, and we expect to accelerate that process."
He said Jitney has already sold or closed five underperforming stores -- two in Mississippi, two in Louisiana and one in Alabama -- "and we're negotiating to sell the others that are earmarked for sale, either in groups or individually."
In a letter to vendors last week, Jitney said the new credit plan focuses on giving vendors security for extending post-filing credit, rather than the plan currently in effect, under which the company pays vendors a portion of their prefiling claims. The program also sets a schedule for payment to vendors of reconciled reclamation claims.