DALLAS — Southland Corp. filed early today for protection from its creditors along with a reorganization plan that would clear the way for selling control of the nation's largest convenience store operator to a Japanese group.
The parent of the 7-Eleven convenience store chain said its bondholders and preferred stockholders have approved the so-called prepackaged reorganization plan, which is being submitted for confirmation by the federal bankruptcy court.
The company has been trying to avoid filing for protection under Chapter 11 of the bankruptcy laws since March, when it announced that it would sell a majority stake to Ito-Yokado Co. Ltd. and Seven-Eleven Japan Co. Ltd., its Japanese franchisees.
The Japanese investors would provide $430 million in new cash in exchange for a 70% stake in common stock in the reorganized company.
The restructuring would leave the creditors with far less than they loaned the firm in 1987, when the founding Thompson family took the company private.
The company said today that a syndicate of lenders has agreed to provide Southland up to $400 million in debtor-in-possession financing.
Southland spokeswoman Cecilia Stubbs Norwood said the company intends to use the funds as working capital to purchase necessary inventories and to continue the company's other normal operating activities.
Southland has asked for a bankruptcy court hearing on Dec. 10 for the confirmation of the prepackaged reorganization plan.