BIRMINGHAM, Ala. — Bi-Lo LLC on Wednesday asked the judge in the Bruno’s bankruptcy case for protection in the event C&S Wholesale Grocers seeks to extract from Bi-Lo debts owed to it by Bruno’s. Bi-Lo and Bruno’s are sister chains which have separate supply agreements with C&S and which separately filed for Chapter 11 bankruptcy protection this year.
According to the automatic stay request, Bi-Lo believes that C&S would buy a substantial amount of Bruno’s assets in auction and convert its supply agreement with the liquidating grocer to a $60 million damage claim. Bi-Lo believes C&S would then seek that claim through Bi-Lo, which guaranteed some of Bruno’s obligations when the its contract with C&S was made last year.
The court is expected to announce results of the Bruno’s auction today.
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