CHANDLER, Ariz. — Bashas' here emerged from operating under Chapter 11 bankruptcy protection after thwarting a last-minute protest by some creditors.
In a letter to employees, Edward N. Basha 3rd, vice president, retail operations, said the company mailed its first round of checks to creditors on the same day it officially emerged — a total reported to be $59.4 million.
Some of the chain's secured creditors sought to put a last-minute hold on the chain's emergence but withdrew their filing when Bashas' reportedly agreed to make principal payments to them monthly rather than annually.
The secured creditors — three banks, which are owed a total of $110 million, and noteholders at an insurance company, who are owed $86 million — had filed an appeal days before the chain emerged. Representatives of Bank of America, Wells Fargo Bank, Compass Bank and Prudential Life Insurance Co. have not made themselves available for comment.
Bashas' plan calls for it to repay 100% of its debts to all secured and unsecured creditors within three years.
“The Chapter 11 process has not been easy,” Basha said in the letter. “It is important to realize that many companies do not make it through the process. It is even more rare for a company to propose to pay back its creditors in full, with interest. We have managed to do both.
“Unfortunately, our nation and state are in a recession. We all must continue to give our best effort daily. As a family, we're in this together. Drawing strength from our past, we will work hard for our future.”
As previously reported, during the course of the bankruptcy Bashas' rejected 37 leases, modified the terms of 67 others and reduced the number of stores from 177 to 132. All stores are in Arizona, except for single locations in Needles, Calif., and Crownpoint, N.M.
During the company's 13-month stint in bankruptcy it also rejected an acquisition offer from Albertsons LLC and named Darl J. Andersen as the chain's president and chief executive officer. He had been brought in as chief restructuring officer following the departure of Michael Proulx shortly after the chain filed for Chapter 11 bankruptcy reorganization.