Majestic Liquor Stores, one Dallas-Fort Worth's oldest and largest liquor store chains, has filed Chapter 11 bankruptcy with between 100 and 199 creditors and between $10 million and $50 million of debt. Majestic which was founded as a lone liquor store in 1942, began expanding in 2005 soon after the death of its founder. In 2009, the company obtained a $16 million loan with intentions of increasing its inventory and expanding its chain by another 100 stores located in Texas and the surrounding states. Unfortunately for Majestic, the expansion never happened and the company, which owns 45 liquor stores in the Dallas-Fort Worth is saddled with debt and will need to close at least some of its existing stores with help of bankruptcy.
Most of its stores will remain open, and customers should see no changes in inventory, prices or customer service, the company said. A few stores will close, pending approval from the bankruptcy court, but those locations were not disclosed.
A bankruptcy judge Monday allowed the company to continue processing credit cards, pay pre-petition wages owed to its more than 400 employees and pay its largest liquor suppliers as well as tobacco, food, soda, ice and paper products suppliers.
Majestic's Chapter 11 bankruptcy will allow the company to restructure its large debt load and maintain enough value in its business so that it can at least attract some debtor- in-possession financing which will enable the company to survive the Chapter 11 bankruptcy process. However, it is very likely that the liquor chain will be forced to scale back some of its employee benefits and even cut jobs. Majestic has not yet revealed how many stores will be closed nor how many job losses will take place during the bankruptcy.