BIRMINGHAM, Ala. -- Bruno's here is expected to request a third 60-day extension from the U.S. Bankruptcy Court in Delaware for submitting a plan of reorganization, according to industry sources.
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Bruno's has been operating as a debtor-in-possession since filing for Chapter 11 protection Feb. 2, 1998. Its original deadline for submitting a reorganization plan was Jan. 15, which was extended to mid-March and then to mid-May earlier this year.
The requested extension results in part from a request by the Hong Kong-Shanghai Bank, which serves as the indenture trustee for Bruno's 10.5% notes due 2005, for the court to appoint an examiner to investigate the company's records to determine what led to the eventual bankruptcy filing -- a standard practice in Chapter 11 cases, industry sources told SN.
In a 10-K report filed with the Securities and Exchange Commission, Bruno's said it experienced a sales decline of 26.4% for the year ended Jan. 30 following the sale or shutdown of 49 stores during fiscal 1998.
Sales dropped to $1.9 billion, compared with $2.6 billion a year earlier, and comparable-store sales fell 10%. The company, which has been operating under Chapter 11 as a debtor-in-possession since Feb. 2, 1998, said it had a net loss of $52.4 million for the year.
