Midwest grocery cooperative Central Grocers Inc. filed for Chapter 11 bankruptcy and will lay off about 550 employees at the company’s Joliet warehouse.
The company is working toward a sale of Strack & Van Til stores and of its distribution center in Joliet, according to Ken Nemeth, President and Chief Executive Officer of Central Grocers.
By mid-July, nearly 550 workers from Joliet warehouse will be out of work. According to the bankruptcy filing, the company already has started liquidating inventory at the warehouse.
“In light of the increasingly difficult environment for independent supermarkets and retailers, we have been working tirelessly to achieve an outcome that is in the best interests of our stakeholders. We are using this court-supervised sale process to provide us the time and flexibility to conduct an orderly sale of the Strack & Van Til stores, while we work to sell the warehouse in Joliet and wind down our wholesale distribution operations,” said Nemeth in a press release.
The grocery cooperative operated as wholesaler for more than 400 independent grocery stores in the Chicago area.
Meanwhile, all 22 Strack & Van Til, Town & Country Market, and Ultra Foods stores in Indiana and Illinois are open and serving customers. Central Grocers said that Strack & Van Til intends to pay vendors in full for goods and services provided on or after the filing date, May 4, 2017.
“Our stores are open, and we are as focused as ever on supporting our customers and providing the legendary service that we are known for. As we move through this process, our priorities, values and commitments to our customers and our communities will not change. We thank our loyal customers for their continued support, and we thank our employees for their hard work and dedication,” said Jeff Strack, President and Chief Executive Officer of Strack & Van Til.
Central Grocers try to stop a case against their company
The company estimated it had 10,000-25,000 creditors. It estimated liabilities of $100 million-$500 million and assets in that same range.
Central Grocers intends to file a motion shortly in the U.S. Bankruptcy Court for the Northern District of Illinois seeking to dismiss the involuntary bankruptcy case commenced against their company in view of its voluntary Chapter 11 filing.
Two days before Central Grocers filed for Chapter 11 bankruptcy, four companies (Coca-Cola, General Mills Inc., Mars Financial Services and Post Consumer Brands) filed an involuntary bankruptcy case against them. alleging about $1.85 million in unpaid debts.