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Mi Pueblo, the San Jose, Calif.-based Hispanic supermarket chain, has filed for Chapter 11 bankruptcy citing a dispute with its lender, Wells Fargo.
The supermarket, which employees more than 3,000 associates, said it will continue to operate its 21 stores and will “use the bankruptcy as a chance to reorganize the 22-year-old grocery chain,” according to the San Jose Mercury News.
“The bankruptcy filing presents a tough challenge for the company in the unforgiving supermarket industry, where few have managed to recover from a Chapter 11 reorganization,” Mercury News further reported. “Most supermarkets survive on hefty lines of credit and good-faith relationships with food vendors, experts say.”
According to reports, Well Fargo wanted to change the terms of Mi Pueblo’s loans in response to the grocer’s debt-to-credit ratio and forecast revenues. Robert Harris, a partner with the firm that represents the grocer, said the requests “weren’t realistic. They weren’t achievable.”
At press time, the grocer did not respond for comment.