Edit

ID NEWS: Fleming files for bankruptcy protection; also under investigation by SEC

The Fleming Cos., Lewisville, Texas, the nation's largest wholesale-grocer, has filed for Chapter 11 bankruptcy protection.

The retail food distributor, which reports assets of $4.22 billion and debts of $3.55 billion, has arranged an interim loan of $50 million from J.P. Morgan Chase and Deutsche Bank and is in talks to raise $150 million in debtor-in-possession financing, according to the New York Times. Meanwhile, Fleming is working with manufacturers to keep customers supplied from existing and new inventories.

The supply-chain giant attributes its problems primarily to the loss of Kmart business early in March. Kmart had filed for bankruptcy protection a year ago, and its contract with Fleming was cancelled with the approval of the Chicago bankruptcy judge overseeing the retailer's reorganization.

However, Fleming is also under investigation by the Securities and Exchange Commission (SEC) for accounting issues involving payments from suppliers. Last Friday, the distributor said it may have to restate financial results for several years. Allegations suggest the company booked anticipated revenues from suppliers even before those companies were billed and that Fleming inflated revenue or profits as well, according to the Times.

Trending

More from our partners