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Bruno’s Seeks to Void Union Contract

Bruno’s Supermarkets has asked U.S. Bankruptcy Court here to void parts of its contracts with the United Food and Commercial Workers union, saying that successor agreements in the deals are an “impenetrable barrier” to a potential sale and survival of the chain.

Jon Springer, Executive Editor

March 11, 2009

2 Min Read
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JON SPRINGER

BIRMINGHAM, Ala. — Bruno’s Supermarkets has asked U.S. Bankruptcy Court here to void parts of its contracts with the United Food and Commercial Workers union, saying that successor agreements in the deals are an “impenetrable barrier” to a potential sale and survival of the chain.

A union spokesman told SN yesterday that it was willing to help, but that workers would not surrender benefits until Bruno’s showed it had “a credible perspective buyer.”

Bruno’s is seeking to sell the chain as a going concern so as to generate the best return to its creditors, but acknowledged in court papers this week it had to do so before its financing runs out in late May. It detailed a net loss of $45.7 million in 2008 and said its losses were expected to accelerate this year. Bruno’s said it would recover “tens of millions more in net proceeds from selling its stores as going concerns” than through a liquidation.

A sale, however, has been complicated by labor contracts with UFCW Local 1657, which contain a clause requiring a purchaser of the company to assume the existing contracts, which were reached in 2005, Bruno’s said. The retailer has four separate deals with the UFCW, the two largest of which expire in July. According to Bruno’s, potential buyers both before and after its Feb. 5 bankruptcy filing said they were not interested in acquiring the chain with the current labor agreement in place.

“What they want us to do is give up language these workers negotiated for themselves without anything being offered in return,” countered Corey Owens, a spokesman for UFCW. “As soon as the company can show us they are ready to keep good jobs in Alabama we’re ready to work with them to make that happen.”

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About the Author

Jon Springer

Executive Editor

Jon Springer is executive editor of Winsight Grocery Business with responsibility for leading its digital news team. Jon has more than 20 years of experience covering consumer business and retail in New York, including more than 14 years at the Retail/Financial desk at Supermarket News. His previous experience includes covering consumer markets for KPMG’s Insiders; the U.S. beverage industry for Beverage Spectrum; and he was a Senior Editor covering commercial real estate and retail for the International Council of Shopping Centers. Jon began his career as a sports reporter and features editor for the Cecil Whig, a daily newspaper in Elkton, Md. Jon is also the author of two books on baseball. He has a Bachelor of Arts degree in English-Journalism from the University of Delaware. He lives in Brooklyn, N.Y. with his family.

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