A federal bankruptcy judge deciding the fate of the nation’s largest chain of Christian book and gift stores held a marathon hearing that ran past 11 p.m. on Tuesday, June 9.
Judge John Gregg now has to decide whether Family Christian Stores will go to a bidder who plans to keep the stores open or a liquidator who plans to sell off the assets to satisfy the company’s creditors.
Gregg hinted he also could start the sales process all over again if he decides the first auction was flawed. He did not say when he expected to rule.
“I hope to have a decision as soon as possible and I wish you all a safe drive home,” said Gregg at the end of the hearing which began nearly 10 hours earlier and ran without a break for dinner in a courtroom whose air conditioning had shut down at 5 p.m.
Family Christian Stores executives argued Gregg should accept a $43 million bid for the company’s assets from Family Christian Acquisition LLC, a company that has the financial backing of Richard Jackson, a wealthy Atlanta businessman.
Jackson also controls FC Special Funding, one of the company’s largest creditors. He led the group that acquired the chain in 2012 and converted it to a non-profit company that pledged to donate all of the company’s profits to Christian charities.
Lawyers for the liquidation bidders argued the deal with Jackson was too cozy and was not as attractive as their bid to buy the company for $49.8 million, liquidate the assets and pay off creditors.
“This thing smells so bad and has so much hair on it, this court cannot approve it,” said Robert Hertzberg, a lawyer for Hilco Merchant Resources LLD and Gordon Brother Retail Partners LLC.
Grand Rapids-based Family Christian, which operates 266 stores in 36 states and employs 3,100 full-time and part-time workers, asked for the sale through bankruptcy court in hopes of shedding some $90 million in debts.
SOURCE: Jim Harger