Monday, December 13, 2010

UPDATED: A&P SUPERMARKETS FILES FOR CHAPTER 11 - STORES TO REMAIN OPEN FOR NOW!

If you grew up in the New England then this Supermarket chain name is very familiar to you. If you did not then this is yet another example of the weakening economy.



PORTLAND, Oregon – The fall into bankruptcy court by the Great Atlantic & Pacific Tea Co. is the culmination of years of decline but creates an opportunity for its competitors and could mean further consolidation in the supermarket industry.
The nation's oldest grocer filed for Chapter 11 bankruptcy protection Sunday after years of struggling with enormous debt, falling sales and rising competition from low-priced peers.
The company, which owns A&P, Pathmark, Super Fresh and other grocery stores, is scheduled to head to court Monday.
The lack of a prenegotiated bankruptcy plan leaves it unclear who will wind up owning the company or how creditors will be paid under this arrangement, though common shareholders will likely see their stakes lose all value.
Kirkland & Ellis, the law firm representing A&P in bankruptcy, did not return a call for comment.
A&P can come back as a viable competitor because it has good locations in the densely populated Northeast and strong brand names, retail consultant Burt Flickinger said. He expects competitors from discounters and supermarkets to large retailers will be evaluating A&P's assets.

A&P does have impressive foothold in the Northeast and its real estate holdings are also quite impressive as well. Stop and Shop and Food Lion will be looking at these assets with great interest.

UPDATE:  RedState.com reports.


For the time being, the company does plan on keeping its stores open, having secured $800 million worth of financing.
A&P secured $800 million in debtor-in-possession financing from JPMorgan Chase & Co. and will have immediate access to a $187 million loan and $200 million in letters of credit, allowing it to keep stores open, according to the filing.

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