PHOENIX (AP) _ Circle K Corp.’s top executive says the convenience store chain’s reorganization plan has won overwhelming support from creditors who voted on competing proposals.
″We believe the end of Circle K’s bankruptcy is in sight,″ Chairman Bart A. Brown Jr. said Monday.
Majorities of Circle K’s bank lenders, senior secured noteholders and unsecured creditors endorsed the company-backed plan, which is based on the sale of the Phoenix-based company for $399.5 million to CK Acquisitions, an international investment group.
Members of the three creditors groups chose between the company’s plan and a competing proposal by a fourth creditor group, the company’s bondholders, which would give new stock and debt to creditors, including the bondholders.
The bondholders, as a creditor group with junior status behind other groups, would get nothing under the company’s plan and were not included in the balloting, which began Jan. 15 and ended March 17.
Under the company’s plan, the banking group would receive $210 million to satisfy $370 million in claims; noteholders would get $132.5 million for $190 million in claims, and vendors, suppliers and other unsecured creditors would get $57 million for about $200 million claims. The bondholders’ claims total $515 million.
The balloting sets the stage for a hearing after which U.S. Bankruptcy Judge George B. Nielsen will decide which of the competing plans to accept. The hearing is to begin April 7 and could last two weeks.
Brown said Circle K could emerge from bankruptcy law protection by late April or early May.
Circle K, which filed for Chapter 11 protection in May 1990, said preliminary results of the creditor balloting indicate its plan was favored by 90 percent of the bank group, 75 percent of the noteholders and 80 percent of the unsecured creditors.
The bondholders’ competing plan got votes from 33 percent of the unsecured creditors and 16 percent of the noteholders, but no votes from the banks. The creditors were allowed to vote for one or both plans.
Bondholders attorney Martin Brecker said he couldn’t comment on the results because the ballots hadn’t been officially tabulated yet.
However, Brecker said the bondholders will reiterate during the April hearing that Circle K is worth nearly twice the $399.5 million offered by CK Acquisitions.
″We plan to try to establish that the value of Circle K far exceeds the purchase price, in hopes of getting the court to block the compan plan and accepted the bondholders’ plan,″ he said.
Circle K operates approximately 2,900 convenience stores in 29 states.