Family Christian Stores Now Wants Creditors to Vote on Its Chapter 11 Bankruptcy Plan

Family Christian Stores

Family Christian Stores is asking a bankruptcy judge to let creditors decide if they want to approve a Chapter 11 bankruptcy plan that would keep the nation’s largest chain of Christian book and gift stores in business.

The request, filed late last week, comes after a U.S. Bankruptcy Judge John Gregg scuttled an auction in which the Grand Rapids-based chain would have been sold to a group that wants to keep the 266 stores in 36 states open.

Family Christian Stores Acquisition’s bid for $43 million was favored by most creditors because it would have allowed the company to continue operating as a retail and online outlet for their wares.

In the election request, the offer by Family Christian Stores Acquisition was sweetened to offer creditors between $52.4 million and $55.7 million, according to the election request filed by Family Christian’s lawyers.

The election would replace a May auction whose results Gregg rejected after it was challenged by a group of bidders that offered $49.8 million with plans to close the stores, liquidate the company’s assets.

Family Christian Stores, which employs 3,100 full-time and part-time workers, asked for the sale through bankruptcy court in hopes of shedding about $90 million of debt to its creditors.

In his June 19 ruling, Gregg said the auction was tainted because Family Christian CEO Chuck Bengochea was promised a job by the successful bidder, Family Christian Acquisition, which is affiliated with Richard Jackson, the Atlanta businessman who heads the group that bought Family Christian Stores in 2012.

Click here for more.

SOURCE: MLive/Grand Rapids Press
Jim Harger