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Bruno's Supermarkets, LLC, owner and operator of the Bruno's and Food World supermarket banners, has filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Northern District of Alabama, to restructure the company's operations to focus on its core strengths. The grocer's operations are expected to continue uninterrupted throughout the bankruptcy process and while the company carries out its reorganization plans.
The company has also named as ist chief restructuring officer Jim Grady senior director with global restructuring and corporate advisory firm Alvarez & Marsal, who brings to the position extensive experience in developing and implementing strategic financial and operational turnaround plan. Grady replaces Kent Moore, Bruno's CEO since October 2007, who resigned last week to pursue other opportunities.
"While Bruno's remains a business with strong potential, a committed group of Teammates, a well-recognized brand and a proud heritage, we are also a company that is challenged by the tightening credit market and the difficult market environment for retailers, especially grocery stores," noted Grady. "After careful consideration of all available alternatives, the company determined that filing for Chapter 11 was a necessary and prudent step that allows us to operate our business without interruption while continuing to implement our restructuring. The action we are taking provides the company with the most effective means to restructure our balance sheet and position Bruno's to compete more effectively."
The company believes that its cash from operations will be enough to meet its normal business obligations. To beef up its current cash position, Bruno's will negotiate a commitment for a debtor-in-possession financing package.
The grocer will seek court approval to continue to offer its customer policies and programs, among them gift cards, returns/exchanges, promotions and loyalty programs, to reduce any impact the restructuring may have on shoppers.
Alvarez & Marsal will help the company through the restructuring process.
Birmingham, Ala.-based Bruno's Supermarkets operates 23 Bruno's and 43 Food World grocery stores in Alabama and the Florida Panhandle. Bruno's has operated as an independent company since 2007 after undergoing several transitions and changes in ownership starting in 1995.