Fairway Group May File for Bankruptcy

by San Antonio Attorney

American Grocery chain Fairway Group Holdings has reached a mutual deal with the creditors in order to restructure debt through the bankruptcy court and obtain a loan in order to maintain its operations, according to reports.

Fairway would reportedly file for Chapter 11 bankruptcy proceedings in May.

Blackstone Group LP credit arm and the GSO Capital Partners, lenders of the company, are currently in negotiation with the deal.  The terms negotiated include the maintenance of store lease contracts at non-profit locations.  After debt restricting, these lenders will acquire the company and manage it as well.

Fairway Group Holdings, the proprietor of the grocery chain, has already sent out a warning to the investors that it has the possibility to breach loan agreements, according to a February 5 filing.  The company also publicly announced the interest of potential investors.

Fairway group, which has 15 branches across the state including wine stores located in New York and Connecticut, has faced the challenges of competing with high-end markets such as Trader Joe’s and Whole Foods.

Fairway Grocers was established in 1933 by Nathan Glickberg.  Glickberg’s early beginnings came from running a fruit and vegetable stand to support his growing children.

In 1954, Nathan Glickberg and his son Leo, worked in collaboration to open the first store located on the 74th and Broadway.  The store was renamed Fairway by Nathan’s wife Cynthia, because the name had already given good luck to Cynthia’s father, running a business under that name.

In 1974, Howie Glickberg, Leo’s son, serves as the third generation heir to the company.  Howie was ambitious and had a greater vision of expanding Fairway.  Howie had only received Fairway as grocery store with sawdust wooden floors, items displayed by milk crates and an ample area fit for four cash registers.  Freeway was improved upon collaboration with two investors.

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