A&P is Losing Millions in Chapter 11 Bankruptcy

by San Antonio Attorney

The grocery store operator filed its Chapter 11 bankruptcy last month. According to court papers filed, the company is losing $4.5 million each week as it waits to get the court’s approval to sell its118 stores.

The gap between the assets and liabilities of A&P is expanding. In February, the total liabilities of the company were $2.3 billion while its assets were $1 billion.

A&P’s financial condition is worsening financial condition. The company has asked the court to be released from its agreement with the unions to provide seniority rights and full severance benefits. The former major player in the grocery industry has also requested to approve the sale of the stores, consisting of A&Ps and other food store brands.

Key Food, Stop & Shop and Acme have offered to purchase the 118 stores for a total price of $570 million, and all of the bids included eliminating bumping rights, which are contractually agreed to provision stated in a labor union’s collective bargaining agreement.

Acme wants to buy 76 stores in 6 states, where 35 of them are in New Jersey. Stop & Shop is interested to acquire 25 stores mostly in New York.  Key Food Stores Co-Operative Inc. wants 17 stores, which includes Food Basics stores in Fairview, Glen Rock and Paterson.

A&P is shutting down 25 stores to cut costs and looking for buyers for the remaining stores.

Filing for Chapter 11 bankruptcy can help in closing down a business by providing an organized liquidation of the business. It is important to find an experienced San Antonio Lawyer to guide you in the process.

 

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