Belle Foods bankruptcy: Grocery company struggles to pay debt
Belle Foods bankruptcy stems from an inability to pay debts, the Birmingham-based company said Tuesday. Before the Belle Foods bankruptcy, the company announced it would hire 300 part-time workers as a cost-saving measure.
Birmingham-based Belle Foods filed for Chapter 11 bankruptcy protection Monday, saying the company is struggling to pay debt with revenue from its 57 stores throughout the Southeast.
In April, the company — which once ran Bruno's and Food World stores in the Birmingham area — announced plans to hire 300 part-time workers at its stores in Alabama, Georgia, Florida and Mississippi to replace full-time workers in a cost saving move.
AL.com reported that (http://bit.ly/12ai8oy ) company officials have said a decline in business, technical issues with its accounting system and concerns over its lending structure and relationships all factored into the decision to file for bankruptcy.
"Additionally, higher payroll taxes in 2013 have led to a decline in purchases by the (Belle's) customer base," the filing said. Company officials added that competition in several of its markets from other grocers didn't help the situation either.
According to documents filed in the U.S. Bankruptcy Court for the Northern District of Alabama, the company owes Southern Family Markets $28 million. Belle Foods bought some of its stores from Southern Family Markets. The company owes C&S Wholesale Grocers $6 million, and also has about $8 million due in other accounts payable.