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The Arizona Republic reports that “the fate of Arizona's hometown grocer could hang on the results of a contentious hearing” that started yesterday in U.S. Bankruptcy Court in Phoenix. The company described itself as one that has gone from being bloated and dysfunctional to one that is a “lean, profitable venture with $104 million in cash and the capacity to pay off some $300 million in debts in a timely fashion.”

“Bashas' Inc., which operates 125 supermarkets throughout Arizona, is seeking court approval of a plan to reorganize and repay its debts, over the objections of its largest creditors. The company's secured creditors, who hold a security interest in the business, contend the plan is unfair and unfeasible and have formally asked the court to reject it.”

If the creditors win, there are two possible results. Bashas’ could come up with an alternative plan, but the creditors also might be able to offer their own restructuring option - which could to lead to the sale of the company.

The hearing is scheduled to continue today and into next week.
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