Bruno's looks to reject collective bargaining agreements to increase chances of asset sales

By Jennifer Lanning Drey

Portland, Ore., March 9 - Bruno's Supermarkets, LLC asked the U.S. Bankruptcy Court for the Northern District of Alabama for approval to reject its collective bargaining agreements with the United Food & Commercial Workers union, according to a news release.

The company seeks to make changes to the labor agreements that will make a sale of some or all of the company's store locations easier, Bruno's said in the release.

Bruno's said the filing was made following several months of extensive discussions between the company and the union regarding the current collective bargaining agreements.

The company and the UFCW have been unable to agree on modified collective bargaining agreements, and impending court deadlines for a sale necessitated the filing of the motion to reject the agreements, Bruno's said.

Bruno's current collective bargaining agreements include a successorship clause, requiring any purchaser of the company's stores to assume the agreements.

The company believes the clause is an impediment to serious conversations with many potential acquirers and that modifying them would increase the likelihood for additional potential acquirers to come forward.

If denied, liquidation possible

If Bruno's is unable to reach sale agreements, it will be forced to pursue other courses of action within the bankruptcy process, including liquidation, Bruno's said in the release.

"What we're proposing would help in our restructuring efforts and makes it more likely that both union and non-union teammates will retain their jobs through the sale to a strategic buyer," Jim Grady, chief restructuring officer for Bruno's, said in the release.

"We intend to continue working with the UFCW and remain committed to reaching a resolution that facilitates a sale while recognizing the Union's role as authorized representative for many of our teammates," he said.

The company noted that if the court approves the motion, it has no immediate plans to alter wages and benefits other than to potentially make adjustments previously agreed to by the UFCW.

The UFCW represents nearly two-thirds of Bruno's employees.

Bruno's, a Birmingham, Ala., owner and operator of Bruno's and Food World, filed for bankruptcy on Feb. 5 in the U.S. Bankruptcy Court for the Northern District of Alabama. Its Chapter 11 case number is 09-10368.

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