Tags: ap | bankruptcy | supermarket | closings | buyouts

A&P Bankruptcy: Supermarket Chain Enters Chapter 11 for Second Time

Image: A&P Bankruptcy: Supermarket Chain Enters Chapter 11 for Second Time
People walk from a A&P supermarket December 13, 2010 in Jersey City, New Jersey. Venerable grocery chain The Great Atlantic & Pacific Tea Company, better known as A&P filed for bankruptcy protection this weekend. (Chris Hondros/Getty Images, file)

By    |   Monday, 20 Jul 2015 01:15 PM

A&P, a national supermarket chain, is offering a plan with a mixture of store sales, closings, and employee buyouts as it returned to Chapter 11 bankruptcy protection Sunday.

The chain filed documents with the U.S. Bankruptcy Court in the Southern District of New York that showed A&P has $2.3 billion in debts and $1.6 billion in assets, according to The Wall Street Journal.

It is the second time A&P has filed for bankruptcy in less than five years, the newspaper noted. Based in Montvale, New Jersey, A&P operates under the brands A&P, Best Cellars, Food Basics, Food Emporium, Pathmark, Superfresh, and Waldbaum's in Connecticut, New York, New Jersey, Pennsylvania, Delaware, and Maryland.

The newspaper said that A&P has given buyout offers to 12,500 employees — more than 90 percent of them union members.

Acme Markets Inc., Stop & Shop Supermarket Co. and Key Food Stores Co-operative Inc., meanwhile, are the top bidders so far for 120 of stores in the A&P chain for an aggregate purchase price of nearly $600 million, court papers revealed, according to The Journal.

"They're closing the stores that nobody bid on," Matthew Casey, a supermarket analyst with Matthew P. Casey & Associates, told the Asbury Park Press. "I suspect that through bankruptcy court they reject the lease, and then they don't owe the landlord, and the landlord gets the property back."

Casey told the Asbury Park Press that since supermarkets operate with such slim profit margins — 1 to 2 percent — competition can be fierce in New Jersey with a glut of stores with specialty newcomers Whole Foods and Trader Joe coming on board.

"A&P really did nothing to combat the new and stronger competition," he said. "Their store volume and amount of business they do (now) was a fraction of what it once was."

A&P has said, according to The Wall Street Journal, that it has not been able to find a store buyer willing accept the current union contracts and its pension obligations. The company said it will try to get "immediate changes" in those contracts to prevent "catastrophic" results on its sale.

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A&P, a national supermarket chain, is offering a plan with a mixture of store sales, closings, and employee buyouts as it returned to Chapter 11 bankruptcy protection Sunday.
ap, bankruptcy, supermarket, closings, buyouts
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2015-15-20
Monday, 20 Jul 2015 01:15 PM
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