Birmingham, Al-based Belle Foods has filed for Chapter 11 bankruptcy protection due to difficulties paying creditors from its 57 stores located in Alabama, Georgia, Florida, and Mississippi, according to Al.com.
Documents filed in the U.S. Bankruptcy Court for the Northern District of Alabama state that the company owes Southern Family Markets $28 million for stores it bought in June 2012. Belle Foods also owes C&S Wholesale Grocers $6 million -- $5.1 in account payable and $900,000 on a pension withdrawal liability note. Belle Foods also has around $8 million in other accounts payable due.
Belle Foods cited technical issues with its accounting system and its lending structure as factors that led to the deterioration in its business.
“Additionally, higher payroll taxes in 2013 have led to a decline in purchases by the (Belle’s) customer base,” the filing said. “Furthermore, (Belle) has also seen an increased amount of competition in several of its markets from other grocers. With older locations, Debtor has had difficulty competing with the newer grocery stores that have moved into its markets.”
Belle Foods announced plans to reduce the number of full-time employees and replace them with up to 300 part-time employees. According to the court filing, Belle Foods has 2,850 employees, approximately 34 percent of which are full-time.
The largest creditors include Barber's Dairy ($559,394), Coca Cola Bottling Co. United ($485,444), Frito Lay ($474,572), Flowers Baking Co. ($402,911), Buffalo Rock Co. ($355,135), and Pepsi Cola Bottling ($377,420).