Tonkon Torp Leads Oregon Grocery Chain Out of Bankruptcy
In one of the quickest and most successful conclusions of a grocery chain bankruptcy proceeding, Tonkon Torp secured court approval of a reorganization plan for client C&K Market, Inc. to emerge from Chapter 11 bankruptcy just seven months after filing.
Headquartered in Brookings, Oregon, C&K Market is an independently owned retailer with more than 60 stores located primarily in small communities in southern and central Oregon and northern California.
A team comprised of bankruptcy lawyers Al Kennedy, Mike Fletcher and Ava Schoen led extensive negotiations with the grocer’s secured and unsecured creditors to recapitalize the company through a debt for equity exchange, maintain the support of trade creditors, and manage liabilities with suppliers of perishable agricultural commodities.
“Grocery business bankruptcies inherently have an added challenge,” said Al Kennedy. “The entry into bankruptcy must be coordinated in a manner that avoids disrupting the store’s supply of products and its ability to continue serving its customers. This was particularly critical in the case of C&K, because the retailer is an established part of many communities that don’t have nearby options for groceries. Any disruption of inventory deliveries could have been disastrous. We had to be fully prepared with a restructuring plan before filing C&K’s bankruptcy petition so that the company could continue operating while strengthening its balance sheet.”
As part of its reorganization, C&K sold or closed about 20 of its original 60 stores as well as 15 pharmacy operations. C&K also obtained exit financing to refinance its senior secured lender. The real estate, financing and corporate facets of the bankruptcy were led by Fletcher and corporate lawyer Kurt Ruttum.
Kennedy noted that the Eugene-based judge of the U.S. Bankruptcy Court for the District of Oregon managed the case in a way that allowed for a very efficient process and conclusion.
Headquartered in Brookings, Oregon, C&K Market is an independently owned retailer with more than 60 stores located primarily in small communities in southern and central Oregon and northern California.
A team comprised of bankruptcy lawyers Al Kennedy, Mike Fletcher and Ava Schoen led extensive negotiations with the grocer’s secured and unsecured creditors to recapitalize the company through a debt for equity exchange, maintain the support of trade creditors, and manage liabilities with suppliers of perishable agricultural commodities.
“Grocery business bankruptcies inherently have an added challenge,” said Al Kennedy. “The entry into bankruptcy must be coordinated in a manner that avoids disrupting the store’s supply of products and its ability to continue serving its customers. This was particularly critical in the case of C&K, because the retailer is an established part of many communities that don’t have nearby options for groceries. Any disruption of inventory deliveries could have been disastrous. We had to be fully prepared with a restructuring plan before filing C&K’s bankruptcy petition so that the company could continue operating while strengthening its balance sheet.”
As part of its reorganization, C&K sold or closed about 20 of its original 60 stores as well as 15 pharmacy operations. C&K also obtained exit financing to refinance its senior secured lender. The real estate, financing and corporate facets of the bankruptcy were led by Fletcher and corporate lawyer Kurt Ruttum.
Kennedy noted that the Eugene-based judge of the U.S. Bankruptcy Court for the District of Oregon managed the case in a way that allowed for a very efficient process and conclusion.
