With an eye towards the Christmas shopping season, lawyers for Family Christian Stores and its creditors approved a plan that could put the nation’s largest chain of Christian book and gift stores under new ownership by mid-August.
Family Christian’s creditors will decide by Aug. 7 whether to approve a transfer to new owners who have pledged to continue operations, according to a plan approved on Friday, July 10, by U.S. Bankruptcy Judge John Gregg.
Brad Baldwin, a lawyer for Family Christian, said they need to emerge from Chapter 11 bankruptcy by mid-August so the company can prepare their Christmas catalogs and order holiday inventory for the chain’s 266 stores in 36 states.
Many of Family Christian’s vendors are refusing to deal with the company until it emerges from Chapter 11 bankruptcy, Baldwin said. Others are demanding cash payments up front, he said.
The Grand Rapids-based chain filed for Chapter 11 bankruptcy in February, saying its sales have fallen from $305 million in 2008 to $230 million in 2014. Sales are expected to fall to $216 million this year. The company claimed assets and inventory of nearly $75 million and debts of more than $127 million.
Family Christian is asking its creditors to approve a plan that would sell the company to Family Christian Acquisition, which has offered to pay between $52.4 million and $55.7 million for the company’s assets and inventory without assuming the company’s debt.
Though creditors and vendors stand to lose millions, most are expected to vote in favor of the sale instead of closing down the chain, which serves as a major distribution channel for their books and giftware items.
The plan calls for creditors to conclude their voting by Aug. 7. Creditors will cast votes in proportion to the amount and type of debt they are owed by Family Christian Stores.
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