Family Christian Stores received a new breath of life, with the Michigan judge approving bankruptcy sale that will allow the store chain to shed millions of dollars in debt and plan out for a future turn-around.
"We have a sovereign God who has a plan for Family Christian," said Family Christian Stores CEO Chuck Bengochea, after the Judge John Gregg approved the insider sale to Family Christian Acquisitions after the publishers and vendors to whom Family Christian owed the debt, many of them Christians, voted 162 to 7 in favor of the sale.
The Family Christian stores had claimed a total debt of about $128 million along with assets worth nearly $75 million under the bankruptcy chapter 11 which permits reorganization of the company, according to an mlive report.
The aggregate sales of the store from 266 outlets operating in 36 states dropped from $305 million in 2008 to a projected $216 million this year.
The stores are sold to FCA for about $55 million, so that supplier creditors could be paid about a cent for each dollar product sold to the stores.
Mark D. Taylor, president of the Tyndale House Publishers told Christianity Today that the deal amounts to huge write-offs by suppliers of books and other products. However, for them, getting something was better than nothing.
"And the most important part of the story is that the Family Christian bookstore chain has survived the bankruptcy and will continue in business," Taylor added.
The store went back to its previous owners from private equity holders three years ago. Bengochea said that through this trial his faith was tested and grew when the deal was met with favor among most of the parties involved. The company had vowed in 2013 to donate all the profits to serve God and help widows and orphans around the world.
Back in 2012, then-CEO of Family Chrisian, Cliff Bartow, had given his vision for the store while buying it back: "The management team and our investors are buying Family Christian because of our shared belief that the Company is uniquely positioned to be both a best-in-class Christian retailer and a significant source of financial support to help those in need. While we have long been committed to giving to Christian causes, we felt called to multiply our impact. We have been on a journey for several years to find potential like-minded Christian owners who share our passion and calling, and believe it's the providence and sovereignty of God that we met and now partner with our new co-owners."
The deal came through as it gave the company's creditors more money than liquidation, while giving vendors an uninterrupted scope for sale of their goods, said Judge Gregg.
