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A&P Files For Bankruptcy

A&P Files For Bankruptcy - A&P, the troubled grocer, filed for Chapter 11 bankruptcy protection Sunday, weighed down by a crushing debt load and competition from low-price rivals.

The Montvale, N.J.-based grocery-store chain—formally called the Great Atlantic & Pacific Tea Co.—listed total debts of more than $3.2 billion and assets of about $2.5 billion in a bankruptcy petition filed in White Plains, N.Y., bankruptcy court.

The grocery chain secured $800 million in so-called debtor-in-possession financing from J.P. Morgan Chase & Co. to keep it afloat during bankruptcy proceedings.

A&P

A&P has been bleeding red ink and most recently posted a $153.7 million loss in the quarter ending Sept. 11. The chain has been through four chief executives in a little more than a year.

Aside from its namesake A&P chain, the company owns Waldbaum's, Food Emporium, Super Fresh, Food Basics and Pathmark.

A person familiar with the situation said A&P's inability to negotiate concessions from its main supplier, C&S Wholesale Grocers Inc., contributed to the chain's decision to seek bankruptcy protection.

A&P also had about $13 million in interest payments due to unsecured creditors Wednesday, the person said, and wanted to preserve that money rather than pay it to those that would be lower down in the payment pecking order during bankruptcy proceedings.

C&S didn't immediately respond to a request for comment.

In a statement, A&P Chief Executive Sam Martin said: "We have taken this difficult but necessary step to enable A&P to fully implement our comprehensive financial and operational restructuring. 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 Files For Bankruptcy
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