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.

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.

Multimedia

Exclusive Content

Financing

Despite their complaints, customers keep flocking to Chipotle

The Bottom Line: The chain continued to be a juggernaut last quarter, with strong sales and traffic growth, despite frequent social media complaints about shrinkflation or other challenges.

Operations

Hitting resistance elsewhere, ghost kitchens and virtual concepts find a happy home in family dining

Reality Check: Old-guard chains are finding the alternative operations to be persistently effective side hustles.

Financing

The Tijuana Flats bankruptcy highlights the dangers of menu miscues

The Bottom Line: The fast-casual chain’s problems following new menu debuts in 2021 and 2022 show that adding new items isn’t always the right idea.

Trending

More from our partners