Many of our Escondido readers probably like to hear success stories, and the recent emergence from Chapter 11 bankruptcy for one California company definitely qualifies. The company, a popular Mexican grocery store chain called "Mi Pueblo," was founded in 1991 and has several stores in a few different locations in California. Last year, however, even despite the rising popularity and demand for Mexican food items, the company hit a low point.
The need for the company to file for Chapter 11 bankruptcy no doubt made many people, employees and customers alike, fear that the company was going to disappear. That is, after all, a common reaction when someone hears that a company is filing for bankruptcy because, even in today's age of constantly streaming news and information, many people still don't distinguish between Chapter 7 bankruptcy and Chapter 11 bankruptcy.
The difference between these two types of bankruptcy filings is usually a key factor in trying to determine whether a company is going to attempt a turnaround or not. Most companies that file for Chapter 7 bankruptcy, otherwise known as "liquidation" bankruptcy, as usually just trying to sell off assets to pay back as much debt as possible before the company closes up shop. A company going through the Chapter 11 bankruptcy process, however, is usually trying to make the hard changes that need to be made in order to return the company to a stable financial footing.
Mi Pueblo was fortunate enough to catch the attention of a key investor, Victory Park Capital, which will infuse about $56 million into the company. Those funds will be the key component of the company's emergence from business bankruptcy.
Source: San Jose Mercury News, "Grocery chain Mi Pueblo comes out of bankruptcy protection," Patrick May, June 5, 2014