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Bankruptcy Court Confirms Fairway Group’s Plan of Reorganization

June 09, 2016, 07:46 AM
Filed Under: Bankruptcy

Fairway Group Holdings Corp., the parent company of Fairway Market, the iconic New York food retailer, announced that the Plan of Reorganization (the "Plan") was unanimously accepted by 100% of voting secured lenders and confirmed by Bankruptcy Judge Michael E. Wiles.  Fairway is expected to emerge from bankruptcy during the week of June 20th, 2016 with approximately $50 million in cash, a substantial reduction of its debt by $140 million and a reduction of Fairway's annual debt service obligations by up to $8 million.  

"Thank you to all the customers who have continued to support Fairway.  Our stores are open and stronger than ever," said Jack Murphy, Chief Executive Officer.

In accordance with the Plan, all prepetition unsecured creditors, including suppliers, employees, unions and other trade creditors were not impaired and were and will continue to be paid in the ordinary course of business.  The senior secured lenders will exchange their loans for new common equity of Fairway and some reinstated debt.  All of Fairway's outstanding shares of common stock will be cancelled pursuant to the Plan with no distribution to the holders thereof.

Jack Murphy added, "We will emerge from bankruptcy with a stronger balance sheet, $50 million in cash and the backing and commitment from the senior lenders and new shareholders to re-invest in the future of Fairway.  We will continue to provide to our customers the best food experience in the greater New York area and we pride ourselves on continuously improving our product offering while maintaining the freshness and quality our loyal customers have come to expect."

In addition, Fairway is on target to open a new Fairway store in Georgetown, Brooklyn in late 2016.

Fairway Market is a food retailer offering customers a differentiated one-stop shopping experience.

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