)Source: Record, The; Bergen County, N.J.) – The Great Atlantic & Pacific Tea Co. filed for Chapter 11 bankruptcy protection Sunday as the struggling Montvale-based grocery store operator aims to restructure its debts.
The 151-year-old company — which operates supermarket chains such as A&P, Pathmark and Food Basics — said it had secured $800 million in so-called debtor-in-possession financing from JPMorgan Chase & Co. that would allow its 395 stores nationwide to continue operating.
“We have taken this difficult but necessary step to enable A&P to fully implement our comprehensive financial and operational restructuring,” Sam Martin, A&P’s president and CEO, said in a statement. “While we have made substantial progress on the operational and merchandising aspects of our turnaround plan, we concluded that we could not complete our turnaround without availing ourselves of Chapter 11.”
A&P listed about $2.5 billion in assets and $3.2 billion in liabilities in its bankruptcy filing.. The company has 41,000 employees, 95 percent of whom are covered by union agreements, according to the filing.
Harvey Whille, president of UFCW Local 1262 in Clifton, which represents 4,000 Pathmark employees in New York and New Jersey, blasted the company for filing for bankruptcy so close to the holidays.
“You’ve got people who have given their lives to this company,” Whille said, adding: “It’s a very frightening thing.”
Whille, who said the company had yet to officially notify his union Sunday, said the union had retained a bankruptcy attorney and financial analyst.
“We’re going to protect the rights of our members to the fullest extent of the law,” Whille said.
Founded in 1859, A&P also operates supermarket chains Waldbaum’s, Best Cellars, The Food Emporium and Super Fresh. The company’s bankruptcy filing follows plans announced earlier this year to close 25 stores in five states and sell six Pathmark stores.
Faced with growing competition from wholesale clubs, supercenters and drugstores, A&P has suffered a string of money-losing quarters.
The company said it lost $154 million in its fiscal second quarter ended Sept. 11, according to regulatory filings.
A&P’s first store was in New York City and sold tea, coffee and spices. It expanded across the nation and by the 1930s was the largest grocer in the country.
Along with its bankruptcy filing, A&P also announced that Frederic “Jake” Brace, who was named chief administrative officer in August, will lead the company’s restructuring.
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