A&P Files for Bankruptcy

by San Antonio Attorney

A&P, a major grocery chain, has declared bankruptcy again and plans to sell 120 of its stores.

The former giant grocery owns food retailers in New York, Pennsylvania and New Jersey. According to A&P, its debt restructuring five years ago did not make sufficient financial foot-hold to keep pace with a changing grocery industry.

A&P, also called the Great Atlantic & Pacific Tea Company, has lost business to rivaling stores like Stop & Shop Supermarket Company and ShopRite, in addition to Target and Walmart, retail big players that have been expanding the variety of items in their grocery shelves. A&P owes $2.3 billion to creditors and has $1.6 billion in assets.

A&P is discussing with Key Food Stores Co-Operative, Acme Markets and Stop & Shop to sell 120 stores with 12,500 employees. The stores are being sold for around $600 million.

But the bidders have not agreed to continue the pensions and collective bargaining agreements with the employees. A&P said it will engage in negotiations with its unions regarding those matters.

The New Jersey-based company plans to shut down 25 grocery stores to cut expenses.

Established in 1859, the business founded by George Huntington Hartford and George Gilman started as a mail-order tea. In the 1930’s, the company grew into a discount food retailer that expanded to 16,000 stores and continued to be a major player in the country’s grocery industry for a long time.

A&P had previously declared bankruptcy in 2010, depleted of cash by intense competition and a slow economic recovery. It exited from bankruptcy after 2 years as a privately operated company. It secured loans and closed several stores as part of it bankruptcy plan.

If your company has more assets than debts, then it may be worth saving. Ask a reputable San Antonio Bankruptcy attorney about filing for Chapter 13 bankruptcy to help you restructure your debts and keep your business.

 

 

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