Alabama-based grocer Belle Food filed for bankruptcy after failing to take care of its debts.
The company said in court documents filed on Monday that revenue from 57 locations wasn’t enough to make ends meet. As a result, Belle Foods was forced to file for Chapter 11 protection with the US Bankruptcy Court in Alabama.
A number of problems behind-the-scenes at Belle Foods reportedly contributed to the bankruptcy filing. WTVM reports that the company’s accounting system, a significant decrease in business, and concerns about its lending structure all played a hand in the decision.
In court documents filed with the state, Belle Foods said competition from other grocers also contributed to the bankruptcy filing. To make matters worse, the company said its customer base is being seduced by the competition.
“Additionally, higher payroll taxes in 2013 have led to a decline in purchases by the (Belle’s) customer base,” the company explained in court documents.
The filing continued, “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.”
According to The Christian Science Monitor, Belle Foods presently owes a significant amount of money. Since revenue is down, the company is unable to pay its debts.
In addition to owing $28 million to Southern Family Markets, the company needs to find $6 million for C&S Wholesale Grocers. Another $8 million is reportedly owed to various accounts as well. Since customers have shifted to competitors, Belle Foods doesn’t think it can meet these financial obligations.
AL.com reports that Belle Foods is in the process of rebranding its stores. The company’s outlets include Bruno’s, Food World, Piggly Wiggly, and Southern Family. The company currently has stores in Alabama, Georgia, Florida, and Mississippi.
What do you think about Belle Foods filing for Chapter 11 bankruptcy?
[Image via Shutterstock.com]