Three years after emerging from its last restructuring, Great Atlantic & Pacific Tea Co. Inc. (A&P) has again filed for Chapter 11 bankruptcy protection. The bankruptcy filing lists the grocer’s assets and liabilities exceeding $1 billion each. A&P also received debtor-in-possession financing of $100 million from Fortress Credit Corp. that the grocer will use to fund its restructuring, according to a report from Reuters.
The company has appointed Christopher McGarry to the role of Chief Restructuring Officer, effective July 19, 2015, and hired Evercore Partners, an investment bank that specializes in selling assets.
“After careful consideration of all alternatives, we have concluded that a sale process implemented through chapter 11 is the best way for A&P to preserve as many jobs as possible, and maximize value for all stakeholders,” said Paul Hertz, President and CEO of A&P. “The interest from other strategic operators has been robust during the company’s sales process to date, and we have every expectation that will continue in chapter 11.”
Advertisement
A&P already has secured buyers for 120 of its 296 stores, with total expected proceeds of approximately $600 million, according to a report from The Wall Street Journal. The company also is currently in talks with Acme Markets Inc. to sell off assets. These asset and store sales will be conducted through a court-supervised sale process and subject to Court approval.
The grocer operates under the brand names A&P, Best Cellars, Food Basics, The Food Emporium, Pathmark, Superfresh and Waldbaum’s. Most stores are expected to remainopen and fully stocked through the Chapter 11 process, however 25 stores will be closing due to “due to lack of interest and significant ongoing store operating losses,” according to a company statement.
“While the decision to close some stores is always difficult, these actions will enable the company to refocus its efforts to ensure the vast majority of A&P stores continue operating under new owners as a result of the Court-supervised process,” said Hertz.
A&P previously filed for bankruptcy protection in 2010 and emerged from the process tin 2012 with financing from investors that included Goldman Sachs.