Phoenix-based Pro’s Ranch Markets filed for Chapter 11 bankruptcy protection on May 28 in U.S. Bankruptcy Court in Arizona.

Chapter 11 bankruptcy allows a company to reorganize if a judge approves the plan and if the creditors agree the plan can be confirmed.

Pro’s Ranch Markets is a Hispanic-oriented grocery chain with stores in seven stores in Phoenix, one store in Las Cruces, N.M., one store in Albuquerque, N.M., and two stores in El Paso, Texas. The grocery chain employs 2,235 employees in four states, according to court documents.

The retailer said a review of its pre-petition Perishable Agricultural Commodities Act potential claimants found 83 fresh produce suppliers were owed about $7.2 million.

The bankruptcy proceeding includes: PRM Family Holding Company LLC; Prodigio Mercado, LLC; Pro’s ABQ Ranch Markets LLC; Pro’s ELP Ranch Markets LLC; Pro’s ELP Ranch Markets Beverage Company LLC; Pro & Son’s LLC; Pro’s Ranch Markets (CA) LLC; and Provenzano’s LLC.

“Operations are continuing and we look forward to proposing a reorganization plan,” said Kasey Nye, partner with Mesch, Clark & Rothschild, Tucson, Ariz. The firm is the attorney for Pro’s Ranch in the bankruptcy proceeding.

Nye estimated the total number of creditors for Pro’s Ranch Markets is in the thousands. Bank of America — the lead secured creditor — alleges it is owed more than $40 million, Nye said.

The U.S. Bankruptcy Court in Arizona said May 29 that Pro’s Ranch Markets had not yet presented complete lists of assets and liabilities; those documents are due before mid-June.

Jason Klinowski, agricultural and food law attorney from the firm of Freeborn & Peters LLP, Chicago, said the grocery chain apparently has a limited pool of assets from which to pay its creditors.

“If the debtor’s voluntary petition accurately reflects the amount of assets in the debtor’s estate, then I think that PACA creditors will be well-advised to quickly object to the debtor’s use of the cash collateral and start looking for alternative sources of recovery,” he said May 30.

In court documents May 28, the company blamed the filing on increased competition, the general decline of the economy in the Southwest, the “adverse, negative and chilling effect” of Arizona’s immigration law and an immigration audit which its competitors supposedly were not subjected to.