A&P Files for Bankruptcy Protection
The Great Atlantic & Pacific Tea Company announced yesterday
that it has filed for Chapter 11 bankruptcy protection to enable it to restructure
operations and put itself on the path to "financial health."
said it planned to continue operating its 395 stores as-is and it had obtained
$800 million in debtor in possession (DIP) funding from JPMorgan Chase. Banners
operated by the grocer include A&P, Food Basics, Food Emporium,
Pathmark, Super Fresh and Waldbaum’s.
Sam Martin, president and chief executive
at A&P, said in a 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. It will allow us to restructure our debt, reduce our
structural costs, and address our legacy issues."
According to a source described
in a Wall Street Journal report as "a
person familiar with the situation," A&P felt it needed to take this
step in large part because of its inability to renegotiate a more favorable
contract with C&S
Brace, who was named chief administrative officer by the company in August,
will add the title of chief restructuring officer as A&P goes through the
Chapter 11 process.
Discussion Questions: What do you think is likely to happen now that A&P
has filed for Chapter 11? What will the filing mean to competitors of A&P?
Files for Chapter 11 Reorganization to Facilitate Financial and Operational
Restructuring – The Great Atlantic & Pacific Tea Company, Inc.
- A&P, U.S. Grocery Store Owner, Files for Bankruptcy as Competition Rises
– Bloomberg News
- N.J. grocer A&P files for bankruptcy – The Star-Ledger
- Grocery chain A&P files for bankruptcy – Reuters
in Bankruptcy – The Wall Street Journal