A&P Grocery Chain Files Chapter 11 Bankruptcy
Posted on December 12, 2010Financially troubled grocery chain A&P has filed a Chapter 11 bankruptcy petition today. The company does not have a prepackaged plan in place with creditors, and the case is likely to be contentious. The Wall Street Journal reports:
The Montvale, N.J.-based grocery-store chain—formally called the Great Atlantic & Pacific Tea Co.—listed total debts of more than $3.2 billion and assets of about $2.5 billion in a petition filed in bankruptcy court in White Plains, N.Y. The grocery chain secured $800 million in so-called debtor-in-possession financing from J.P. Morgan Chase & Co. to keep it afloat during bankruptcy proceedings.A&P's has been unable to reach a deal with its main supplier, C&S Wholesale Grocers Inc., which triggered the filing. The company also has huge interest payments due this week to unsecured creditors of around $13 million.
A&P has been bleeding red ink and most recently posted a $153.7 million loss in the quarter ending Sept. 11. The chain has been through four chief executives in a little more than a year. Aside from its namesake A&P chain, the company owns Waldbaum's, Food Emporium, Super Fresh, Food Basics and Pathmark.
A&P Chief Executive Sam Martin issued this statement: "We have taken this difficult but necessary step to enable A&P to fully implement our comprehensive financial and operational restructuring. While we have made substantial progress on the operational and merchandising aspects of our turnaround plan, we concluded that we could not complete our turnaround without availing ourselves of Chapter 11."
A&P plans to reorganize, get new financing and remain a viable entity.