EUGENE - An attorney representing the Brookings-based parent company of Ray's Food Place said Thursday that CandK Market Inc., which filed for Chapter 11 bankruptcy, will emerge a "good company" that will continue to operate and pay its creditors.
Albert Kennedy, an attorney with Tonkon Torp LLP in Portland representing CandK Market Inc., said the goal is to emerge from bankruptcy quickly.
"Debtors and major creditors are very concerned with the professional fees and expenses of this case, and we do believe the best way to minimize the expenses is to move the case forward as fast as reasonably possible," Kennedy told U.S. Bankruptcy Court Judge Frank Alley during a hearing on Thursday.
Kennedy said he hopes to have a plan outlining how creditors will be paid by the end of January.
The company filed for bankruptcy in November and announced the closing or sale of 16 stores, including those in Harbor, Smith River and Crescent City.
Approximately 500 employees out of about 2,500 will likely lose their jobs. The company owns about 60 stores in Oregon and Northern California, called Ray's Food Place, Shop Smart Food Warehouse, CandK Market and Lo Bucks.
Kennedy told the judge "the transition into a Chapter 11 has actually gone very smoothly."
Sales in some of the stores have been somewhat higher than projected, Kennedy said. Store closure sales have also met projections.
Several attorneys representing a variety of creditors were in attendance during the hearing on Thursday. Tom Orr, a Eugene-based attorney, who represents Varsity Ice Cream Co., Inc., based in Eureka, Calif., said he will be "filing a claim soon" and is worried the expenses and fees CandK Market Inc. might incur in the bankruptcy process would inhibit the company from paying its creditors.
His concern was echoed by Brad Copeland, an attorney who represents the landowners of the Bend store's property, who said his client wants to ensure the bankruptcy process moves forward efficiently. With all the legal and consulting fees, he was there to make sure "fees don't get disproportionately high."
Discussed at the hearing on Thursday was hiring Otterbourg, P.C., which is based in New York, as lead co-counsel to represent the unsecured creditors' committee. Officials from the law firm told the judge on Thursday that they would work efficiently, but concerns over their high rates were raised.
Kennedy, the attorney for CandK Market Inc., said after the hearing on Thursday that although the intention is to pay back all creditors, "there is a limited pot" of money, so his client shares in the goal to keep costs low.
CandK Market has assets in the $10 million to $50 million range and liabilities between $100 million and $500 million.
The family-owned company was founded in 1956. It pointed to competition from Wal-Mart Supercenters and Costco Wholesale Corp. stores as cutting into its profit margins.