The future of Family Christian Stores and its workforce currently hangs in the balance in U.S. Bankruptcy Court. However, company president and CEO Chuck Bengochea stated that in addition to the lawyers arguing on behalf of the company, he is placing his faith in God as part of the decision.
According to Jim Harger of MLive.com, Bengochea expressed on Wednesday that the bankruptcy situation surrounding Family Christian Stores "is in God's hands," adding that his company will "see where this ends up." He became the head of Family Christian Stores a year ago after he left his position as president and CEO of The Original Honeybaked Ham Co. of Georgia.
"God may have another plan for us. Whatever God plans is what's best," Bengochea said, adding that the company's status as a nonprofit organization plays a vital role in Christian ministries and charities.
According to Harger, U.S. Bankruptcy Court Judge John Gregg will hear arguments next week for a plan to sell the chain's assets to a bidder who intends to keep its 266 stores operating. He will also hear from another bidder who plans to close the stores and liquidate the company's assets.
"Bengochea and most of the company's vendors are hoping Gregg will approve a bid from FC Acquisition that promises to keep the business going," Harger wrote. "That bid, which is being funded by Family Christian's owner Richard Jackson, offers to pay between $42 million and $43.6 million in cash for the company's assets while keeping the company going."
However, Harger reported that FC Acquisition's bid is being challenged by Hilco Merchant Resources LLC and Gordon Brothers Retail Partners LLC. Their bid has the support of the Credit Suisse bank, which is owed $34 million.
"My prayer is that God would soften Credit Suisse's heart," Bengochea said. "I would love nothing more than for an agreement to be reached with Credit Suisse."
Harger reported that many vendors and suppliers of Family Christian stand to lose money from either bid. However, Bengochea defended the company's decision to seek bankruptcy protection, which allowed it to shed most of its $127 million in debt.
"The bankruptcy code exists to help companies that are struggling to get healthy again and move on," Bengochea said.
According to Harger, the company's origins go back to 1931, when the Zondervan brothers, Pat and Bernie, began a publishing house. Harper Collins spun off the chain in the 1990s after it purchased the Zondervan publishing house.
"Family Christian Stores were crippled by the Great Recession and have struggled to regain their footing in a market where digital access to music, movies and books has replaced much of the traffic they relied on in their brick and mortar retail stores," Harger wrote, citing Bengochea.
Bengochea indicated to Harger that the company will restructure and work on its e-commerce strategy while attempting to keep its stores open if it is given a second chance. According to the company's Feb. 11 bankruptcy petition, annual sales have fallen from $305 million in 2008 to $230 million in 2014; predicted 2015 sales are expected to fall to $216 million.
"We would rather that folks shop us in the stores," Bengochea said. "But we don't get to shop. The customers get to choose."
