NOTE 13 — INCOME TAXES

Income tax (benefit) expense consisted of the following:


	Successor												Predecessor
	Twelve Weeks Ended November 7, 2011			Forty Weeks Ended November 7, 2011			Twelve Weeks Ended November 1, 2010			Sixteen Weeks Ended November 1, 2010			Twenty-Four Weeks Ended July 12, 2010
Federal and state income taxes	$	(2,483	)	$	(5,155	)	$	(3,135	)	$	(8,953	)	$	7,173
Foreign income taxes		341			1,278			392			473			599

Income tax (benefit) expense	$	(2,142	)	$	(3,877	)	$	(2,743	)	$	(8,480	)	$	7,772

Our effective income tax rate for the Successor twelve and forty weeks ended November 7, 2011 differs from the federal statutory rate primarily as a result of non-deductible share-based compensation expense, state income taxes, federal income tax credits and the release of $237 of unrecognized tax benefits due to statute closures. Our effective income tax rate for the Successor twelve and sixteen weeks ended November 1, 2010 differs from the federal statutory rate primarily as a result of non-deductible transaction-related costs, non-deductible share-based compensation expense, state income taxes and the release of $1,501 of unrecognized tax benefits due to statute closures. Our effective income tax rate for the Predecessor twenty-four weeks ended July 12, 2010 differs from the federal statutory rate primarily as a result of non-deductible transaction-related costs, state income taxes and certain expenses that are non-deductible for income tax purposes.

We had $2,776 of tax benefits as of January 31, 2011, that, if recognized, would affect our effective income tax rate. During the forty weeks ended November 7, 2011, we released $237 of unrecognized tax benefits due to statute closures. We believe that it is reasonably possible that decreases in unrecognized tax benefits of up to $544 may be necessary within twelve months as a result of statutes closing on such items. In addition, we believe that it is reasonably possible that our unrecognized tax benefits may increase as a result of tax positions that may be taken during fiscal 2012 and 2013.

As of November 7, 2011, we maintained a valuation allowance of $10,147 for state capital loss carryforwards and certain state net operating loss and income tax credit carryforwards. Realization of the tax benefit of such deferred income tax assets may remain uncertain for the foreseeable future, since they are subject to various limitations and may only be used to offset income of certain entities or of a certain character.