Retail

Associated Wholesalers Seeks Bankruptcy, Plans Asset Sale

September 10, 2014

Associated Wholesalers Inc., a food distributor, filed for bankruptcy with a plan to sell its assets, citing “fierce competition” in the grocery supply business, Bloomberg News reported today. The company in chapter 11 papers filed in court yesterday listed as much as $100 million in debt and said that it planned to hold an auction with C&S Wholesale Grocers Inc. as the lead bidder. AWI listed some of the biggest U.S. brands as creditors, including Tyson, Kellogg, General Mills and ConAgra, each owed more than $2 million; and Smucker, Nestle, Kraft and Dannon, each owed more than $1 million. The company, whose White Rose unit also filed for bankruptcy, has been failing in part due to “compressed margins and fierce competition,” Chief Restructuring Officer Douglas Booth said in a court filing. In the planned sale, C&S will be the “stalking horse” or initial bidder in a court-supervised auction, subject to higher or better offers, AWI said. Booth said that AWI serves 800 supermarkets and other stores in the U.S. mid-Atlantic region, with about 1,400 employees.

RadioShack Races Against Clock as It Weighs Refinancing Options

August 29, 2014

Troubled electronics retail chain RadioShack is racing against the clock as it weighs its options, including a refinancing or a bankruptcy, TheStreet.com reported yesterday. It is burning through cash rapidly as it is unable to close money-losing locations. RadioShack planned to close up to 1,100 stores earlier this year, which was later blocked. Holding up the plan is Salus, which holds a $250 million second-lien loan. There is a covenant on that loan that requires RadioShack to get the lender's approval if it is to close more than 200 stores, but closing those stores would also mean a reduction in inventory. RadioShack hopes to get help from hedge fund Standard General, which might help with arranging financing that could not only buy RadioShack some extra time, but also give it flexibility in closing stores.