A&P, formally known as the Great Atlantic & Pacific Tea Co., filed Chapter 11 bankruptcy on Sunday July 19, 2015. Although the company has roots dating back to 1859, this marks the second bankruptcy for the company in just five years.
The company listed assets and debts of more than $1 billion each in its bankruptcy filing in New York.
According to a North Jersey article by Joan Verdon, A&P plans to sell most of its supermarkets. A&P’s supermarkets include Waldbaums, Food Emporium, Super Fresh, Pathmark, and Food Basics.
Verdon wrote, “Supermarket chains Stop & Shop Supermarket Co., Acme Markets Inc. and Key Food Stores Co-op Inc. have announced plans to buy 120 of A&P’s 296 properties, including 13 in Bergen and Passaic counties.”
According to court documents, the company received debtor-in-possession financing of $100 million from Fortress Credit. A&P hopes the imminent sale of the supermarkets will be concluded by October 30.
In addition, A&P requested approval to close 25 underperforming stores.
Many speculate A&P struggled to keep up with niche supermarkets including Whole Foods Market Inc. and Trader Joe’s Co. Other competitors the company failed to compete with include Walmart and dollar store chains.
A&P wrote in its latest bankruptcy filing, “A&P did not achieve nearly as much as was needed to turn around its business.”
The company employs nearly 28,500 employees, and approximately 90% are union members. The union hopes A&P will do the right thing in renegotiating with union employees.
United Food and Commercial Workers International Union represents the workers at A&P’s supermarket chains. The union said in a statement, “As difficult as this bankruptcy process is, our message to A&P is a simple one – we expect A&P to do what is right by members and their families.”
The case is In re Great Atlantic & Pacific Tea Co., 15-23007, U.S. Bankruptcy Court, Southern District of New York (White Plains).