Grand Rapids-based Family Christian LLC quietly filed notice in bankruptcy court on Monday, withdrawing its motion to sell virtually all of its assets under Section 363 of the United States Bankruptcy Code.
The national retailer of Christian books, bibles and gifts gave no reason for its filing to withdraw the motion to sell. Executives and attorneys for Family Christian did not return calls seeking comment; however, the company did post a news release acknowledging the court action on its website today, two days after the notice was filed in the U.S. Bankruptcy Court for the Western District of Michigan.
The proposed 363 sale of assets to a pre-positioned “stalking horse” buyer called Family Christian Acquisitions, LLC (FCA) had drawn considerable objections from creditors and the bankruptcy trustee. In a February court hearing as well as subsequent objections filed in bankruptcy court, lawyers for the creditors objected to the close relationship between the proposed stalking horse buyer, the company’s current owners and its senior lender, Atlanta-based FC Special Funding, LLC. All three companies are thought to be controlled by Richard Jackson, an Atlanta entrepreneur and founder of Jackson Healthcare, Inc., a healthcare staffing company.
“The debtors, the senior lender, and the stalking horse bidder are all ultimately owned or controlled by the same person(s),” wrote United States Trustee Daniel McDermott in an objection filed with the bankruptcy court last week. Family Christian did not attempt to sell the company before filing for bankruptcy protection; instead, they proposed to potentially sell more than $64 million in inventory to another insider controlled by the same person for $28 million and the assumption of leases, according to the filing.
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SOURCE: MiBiz – Nick Manes