Update: An audio recording and presentation materials from Reorg Research’s webinar covering the Southeastern Grocers chapter 11 filing are now available here. In the webinar, their coverage team provides an overview of the company and its financials, prepetition developments and creditor negotiations, and the chapter 11 filing, including highlights from the first day hearing.
Southeastern Grocers has commenced chapter 11 proceedings in Delaware. The company reports $1 to $10 billion in assets and liabilities.
“This course of action enables us to continue writing the story for our company and our iconic, heritage banners in the Southeast.”
—Anthony Hucker, President and Chief Executive Officer
The Restructuring Support Agreement
The filing was preceded by a Restructuring Support Agreement. According to the company’s Press Release, the filing and accompanying pre-packaged plan are the next steps in implementing that agreement. Creditors holding 80% of Southeastern’s 8.625%/9.375% senior PIK toggle notes due September 2018 are party to the RSA. Private equity sponsor Lone Star Capital has also signed on. The restructuring will decrease overall debt levels by more than $500 million.
What About Suppliers, Trade Creditors, and Landlords?
Southeast Grocers has indicated that all general unsecured claims, including supplier partners and trade creditors, will be paid in full. A letter to suppliers and a FAQ sheet are available on the company’s website. More than 580 stores are expected to continue operating during the restructuring process. However, the company intends to close 94 underperforming stores. A list of Affected Stores is available here.