Family Christian Stores has asked a judge to allow a vote on the company's plan to sell its assets and debts to an internally held creditor, a move that would allow the retailer to keep its doors open as it moves out of Chapter 11 bankruptcy.

The request comes on the heels of Judge John Gregg's denying Family Christian Acquisition's auction bid, but allowing the creditors to vote in favor of the bid could help keep that option open. The main point of contention with Judge Gregg's refusal to clear the bid was behind-the-scenes dealings between Richard Jackson—who controls Family Christian Acquisition and FC Holdings, one of the chain's largest creditors, and was one of the three businessmen who bought Family Christian Stores before turning it over to the nonprofit Family Christian Ministries—and Family CEO Chuck Bengochea, dealings Gregg called "reckless" and "inappropriate" in his ruling.

Despite having a lower cash value than an opposing bid placed by a joint venture of Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC, many creditors favored Family Christian Acquisition's bid because it would allow the stores to remain open, providing more retail outlets for carrying their products. According to mibiz.com, the Gordon/Hilco partnership—which levied the challenge against Family Christian Acquisition's bid—is no longer involved in the process.

If the court allows the creditor vote to proceed, the various classes of creditors would each vote on whether to approve the proposed deal in vote shares commensurate to the size and type of Family debt holdings. In order for the deal to move forward, each class would have to approve the measure with 51 percent of the vote, along with votes representing 67 percent of the dollars owed, according to mlive.com.

Mibiz.com also cites two sources familiar with the case and with Chapter 11 bankruptcy law as saying the deal is unlikely to fall through at this point in the proceedings.

The proposed deal would keep nearly all of Family's stores open. Judge Gregg will hold a hearing Friday, July 10, on whether to allow the vote to proceed.

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