It appears as if there are sufficient assets in the Pro's Ranch Markets Chapter 11 bankruptcy protection proceedings to pay PACA Trust claimants in full.

Attorneys representing Pro's Ranch Markets of Phoenix, AZ, and produce industry creditors have been discussing establishing a procedure for expedited payment of PACA Trust claims related to that case. In fact, a hearing date has been set for June 11 by the bankruptcy judge to hear a motion with regard to establishing the PACA claims procedure.

Jason Read, an attorney with Rynn & Janowsky, the Newport Beach, CA, law firm representing many of the produce creditors, told The Produce News on Wednesday, June 5 that among the “first day motions” filed in the bankruptcy case was one dealing with PACA claimants. For procedural reasons the judge tabled that motion until June 11. Read said he expects to file an amended motion prior to that date and if all goes as expected, the procedure will be accepted and will begin to move forward.

First order of business will be to identify and validate all PACA Trust claims. Read said he has not independently done that, but debtor’s attorney has indicated that the universe of PACA Trust claims is less than $7.2 million. And some of those claims will not qualify as they also involve non-produce sales from some suppliers. “I have been told by the debtor’s attorney that there appears to be sufficient assets in inventory and cash on hand to handle these claims,” Read said.

Though earlier published reports by other trade industry sources said Pro's Ranch had less than $50,000 in assets, Read said that was “flat wrong.” He said the filings clearly indicated $1 million to $10 million in assets and indications are that they are more than that. The debtor’s attorney was not immediately available to confirm that information at The Produce News press time.

The bankruptcy filing was reportedly prompted by the calling of a $40 million note by Bank of America.

Pro’s Ranch Markets, is a family-owned chain of grocery stores that operates largely in Hispanic communities in several southwestern states. In a press release the company said it will remain open and reorganize. “We made this important move to improve the overall health of the company and save the jobs of more than 2,200 team members,” said Rick Provenzano, Pro’s Ranch Markets’ chief operating officer. “We are and have always been a family business. This opportunity to restructure our business will result in a stronger and more stable company for years to come.”

The company’s chief financial officer, Michael Provenzano Jr., blamed the recession for the company’s financial difficulties. “Our revenues were hurt by the lingering recession. This reorganization will put us back on a more firm financial footing. We do not plan to sell or close any stores, and our shelves are fully stocked. We’ve had the honor and privilege of being in business since 1982, and we’re committed to continuing to provide our customers with great products at low prices, and taking care of our vendors and our employees and their families.”

Pro’s Ranch Markets has obtained a loan commitment for $3 million to continue operations smoothly during the reorganization, Provenzano said. “The company’s short-term plan is to emerge from Chapter 11 as soon as possible, and over the next few months we will be laying out our long-term strategy to ensure success.”

Pro’s Ranch Markets was founded 31 years ago by Mike Provenzano Sr. Since then it has grown to 11 stores in three states, including seven stores in Arizona, two in New Mexico and two in Texas. The company was named Arizona Retailer of the Year in 2004 and 2012 by the Arizona Food Marketing Alliance.