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C&K Market enters Chapter 11 bankruptcy; no changes expected for chain's local supermarkets
LAKE COUNTY, Calif. – The parent company of two Lake County supermarkets said it has filed for Chapter 11 bankruptcy.
C&K Market Inc., based in Brookings, Ore., said it took the step of filing the voluntary Chapter 11 petition to address legacy costs, sell or close underperforming stores, and resolve debt issues.
The case was filed in the U.S. Bankruptcy Court for the District of Oregon in Eugene.
C&K's operations are expected to continue as normal throughout the bankruptcy process, as it develops a reorganization plan.
The company owns Bruno's Shop Smart in Lakeport and Ray's Food Place in Clearlake.
Company spokesman Grant Lunde told Lake County News that both of Lake County's stores will remain open, with no changes to their operations.
Lunde said C&K has owned the Clearlake store since 1995 and the Lakeport store since 2006.
The family-owned company – which operates 60 grocery stores under the banners of Ray's Food Place, Shop Smart, C&K Market and LoBuck$ – said it plans to emerge from Chapter 11 in 2014, and has a commitment for debtor-in-possession financing.
“Entering Chapter 11 was a difficult decision for our family,” said Doug Nidiffer, chairman of the board. “We seriously considered our options, and believe this approach is in the best interest of many of the communities we've served over the years. We will retain about two-thirds of our 60 stores, tighten our corporate structure, and shed legacy costs.”
At the initial hearing in a few days, a number of first day motions will be filed, including one that will seek approval of a debtor in possession financing facility with U.S. Bank, the company said.
C&K reported that it will continue to operate in the ordinary course of business during the bankruptcy, as it reorganizes.
“The decision to sell or close about a third of our stores was extremely difficult,” said Gregory L. Sandeno, president of C&K Market. “We appreciate the dedication and hard work of all of our employees and are saddened that some cannot continue with us. We anticipate we will eliminate approximately 20 percent of our positions, as a result of selling or closing stores and restructuring on the corporate side.”
“The positive news is that we will put our energies into the remaining stores with our family-friendly service, and intend to emerge from bankruptcy as a stronger, leaner company,” Sandeno said.