FREE MEMBERSHIP Includes » ABL Advisor eNews + iData Blasts | JOIN NOW ABLAdvisor Gray ABLAdvisor Blue
Skip Navigation LinksHome / News / Read News


A&P Receives Court Approval of First Day Motions

July 21, 2015, 07:53 AM
Filed Under: Bankruptcy

The Great Atlantic & Pacific Tea Company, Inc. (A&P) announced that the United States Bankruptcy Court for the Southern District of New York has approved the company’s First Day Motions. Collectively, the orders granted by the Court will help ensure that the company continues to conduct its business and serve customers in the ordinary course during the process. The company currently operates under the brand names A&P, Best Cellars, Food Basics, The Food Emporium, Pathmark, Superfresh and Waldbaum's.

Among the First Day Motions approved, the Court has granted A&P immediate access to $50 million of the $100 million debtor-in-possession (DIP) financing provided by Fortress Investment Group. This DIP facility will enable A&P to continue operating its stores and pay its suppliers, vendors, employees and others in the ordinary course of business.

As previously announced, the company executed asset purchase agreements to sell approximately 120 stores, and it will continue strategic sales through the chapter 11 process. A&P also decided that it will close 25 stores in the near-term due to lack of interest and significant ongoing store operating losses. All asset and store sales will be conducted through a Court-supervised sale process, subject to Court approval and certain other conditions. The sale process could include a possible credit bid for certain assets to be purchased by A&P’s current investors.

Aside from the 25 stores expected to close, A&P will continue to conduct business and serve customers at its stores during the Court-supervised sale process. These stores are fully stocked with a complete range of high quality products, and all existing customer promotional and loyalty programs will stay in place during this process.

“We are pleased that the Court has granted these motions promptly, which allows us to continue operating in ordinary course during this process – continuing to pay employees, work with suppliers and serve customers,” said Paul Hertz, President and Chief Executive Officer of A&P. “We are confident that pursuing a sale process implemented through chapter 11 will enable us to preserve as many jobs as possible and ensure that we achieve the best possible outcome for all stakeholders. I want to thank our employees for their hard work and commitment to our company, as well as our suppliers for their help in guaranteeing that our stores are fully stocked and that we are able to continue meeting the needs of our customers and their families without interruption."

The company’s legal representative in its chapter 11 cases is Weil, Gotshal & Manges LLP and its financial advisors are Evercore, FTI Consulting and Hilco Global.

Comments From Our Members

You must be an ABL Advisor member to post comments. Login or Join Now.