WILMINGTON, Del. -- Big V Supermarkets, Florida, N.Y., as part of its financial restructuring, is looking into three possible directions: sale of the company, entering a new supply agreement, and also remaining within its current supply arrangement with Wakefern Food, Elizabeth, N.J.
During a hearing in the U.S. Bankruptcy Court here late last month, Big V stated that it is deliberating these three possibilities for restructuring under bankruptcy protection.
The judge agreed to extend the period of exclusivity for submitting a plan through Sept. 12, based on what he considered "evidence of progress," according to company spokesman Michael Freitag.
Freitag told SN that the company is continuing discussions with Pathmark, Carteret, N.J., which made an offer of interest in the company earlier this summer.
"Big V has made preliminary talks with Pathmark, basically limited to due diligence and confidentiality agreements, but the company is exploring that option," Freitag said.
Harvey Gutman, spokesman for Pathmark, told SN that the company has not made a formal offer to purchase the company at this time, but it is interested and looking further into the specifics of a possible deal.
Freitag also told SN that the company has identified an alternative supplier should it exit the Wakefern cooperative and remain an independent operating unit.
Freitag said that Big V will reveal the name of the new supplier should it decide to pursue that direction further.
The company is also exploring the possibility of continuing operations under its Wakefern contract. According to Freitag, Big V and Wakefern have been in talks, but no substantial progress has been made.
Karen Meleta, spokeswoman for Wakefern, told SN that it is too early to predict if Big V will remain within the cooperative, but that Wakefern is optimistic.
"We believe any outcome involving Big V remaining part of Wakefern is in the best interests of all parties involved," Meleta said.
Last month the U.S. Bankruptcy Court ruled that Big V would have to pay a substantial exit fee in terminating its supply agreement with Wakefern. The co-op supplier estimated a withdrawal liability in the range of $280 million for lost volume if Big V breaks with Wakefern.
Freitag also said that Fleet Bank, Wilmington, Del., Big V's primary creditor, has supported the company's decision to move in one of these three directions. Fleet recently pressed the bankruptcy court for permission to facilitate a sale of Big V to the highest bidder.
"There was a limited objection to some of the stipulations, but Fleet was pleased that Big V was showing progress in completing a restructuring plan, and especially pleased that the company has decided to explore the possibility of a sale," Freitag said.
Freitag added that the company will most likely submit its plan of reorganization, which will decide the future of Big V, on Sept. 12.