Dive Brief:
- Midwest convenience retailer Mega Consumers Cooperative filed for Chapter 11 bankruptcy protection on Sept. 1, according to documents filed with the U.S. Bankruptcy Court for the Western District of Wisconsin.
- The retailer operates 31 c-stores across Wisconsin, which are jointly owned by Consumers Cooperative Association (CCA) of Eau Claire and Cenergy LLC, an affiliate of CCA. Twenty-three of its stores are under the Holiday banner, while eight are unfranchised and sell Shell, BP and Cenex-branded fuel.
- Mega will close 13 “underperforming” c-stores by Sept. 5 as it looks to focus its energy on the remaining 18 locations in its network, according to court documents. The company has been approved to receive cash collateral to run these stores and pay employees during this time.
Dive Insight:
The 13 stores set to close are located across Eau Claire, Abbotsford, Durand, Elk Mound, Stanley, Galesville, Altoona, and Chippewa Falls, Wisconsin, according to court documents.
Mega is shuttering these locations because they “have consistently negative cash flows,” and continuing to operate them would put Mega’s “entire business enterprise in jeopardy of collapse,” according to court documents.
While all stores are co-owned by CCA and Cenergy, they’re managed by Diversified Management Group Inc., a non-debtor entity.
The company will offer continued employment to all staff members impacted by the Sept. 5 store closures. Mega has 213 employees, with 53 being paid a salary or paid through Diversified Management Group, while 160 are paid on an hourly basis by Cenergy.
The cash collateral will allow Mega to sustain business operations, including paying its employees, vendors, suppliers, landlords and other stakeholders. Without these funds, its business would be brought to a halt, resulting in “immediate and irreparable harm,” court documents note.
Eau Claire-based Mega Consumers Cooperative was founded in 1935. It has more than 20,000 co-op members to date, according to its website.
