Family Christian Stores, the bankrupt Christian retail chain, has accepted the buy-out bid of FC Acquisitions, which is owned by the same investors who own FCS, WORLD News Service reported Monday.
In February, FCS declared Chapter 11 bankruptcy with more than $100 million in debt. FC Acquisitions’ purchase price of $42 million will not infuse that much cash into the chain, WORLD reported. Under the agreement, FC Acquisitions will assume some $46 million of the debts, to be paid at some time in the future, not at the time of sale, which awaits the approval of a bankruptcy judge. The final hearing is scheduled for June 9 in Grand Rapids, Mich.
FCS has some 266 stores in 36 states, and the bankruptcy sent shockwaves through the Christian publishing industry, touching off lawsuits by vendors, primarily publishers who had millions in inventory on consignment with the chain. Under the terms of the deal, publishers agreed to accept at least partial payment for the disputed inventory. FCS also owes about $34 million to Credit Suisse, though it is not yet clear how much of that debt will be repaid.
FCS owes about $23 million to FC Special Funding, which is owned by Richard Jackson, president of the board of the company that owns both FCS and FC Acquisitions; according to WORLD, the deal apparently does not call for FCS to repay that debt. (Court filings were not available for review by PW.) During initial bankruptcy proceedings, FCS sought approval of a quick sale to FC Acquisitions, but creditors objected to the relationship between FCS and FC Acquisitions, and the offer was scrapped.
According to WORLD, FCS has lost some $6 million in operating revenue while creditors waited for a resolution.