This archive report was first published on 13 October 2019.
Uchumi Supermarkets is facing a fresh challenge in its debt crisis after suppliers rejected a proposal to write off liabilities worth Sh3.6 billion.
According to a court ruling on September 26, the Company Voluntary Arrangement (CVA) supervisor, Owen Njenga Koimburi, was directed to engage secured creditors and present a report within 30 days outlining how they would be paid by Uchumi and the retailer's overall plan.
Earlier this year, suppliers had agreed to a 70 percent cut on the retailer's arrears, but this decision has now been quashed.
Uchumi has also received a reprieve after the court issued an injunction stopping the determination of other cases against the retailer and landlords from kicking them out of premises owing to unpaid rent until the case is determined.
The court order, issued on an unspecified date, granted a stay on all legal proceedings pending before other courts, tribunals, and quasi-judicial bodies against Uchumi Supermarkets Plc pending the hearing and determination of the petition or further orders of the court.
The order covered all judgments, decrees, orders, execution proceedings, including proclamations of attachment, distress for rent, and any other form of execution proceedings against the struggling retailer.
Uchumi accuses a section of suppliers of colluding with its employees to fleece the retailer through fictitious claims that contributed to its collapse.
