Skip navigation

NEWS ROUNDUP

Creditors Offer Grand Union PlanWAYNE, N.J. -- A group of creditors of Grand Union Co. here submitted its own plan of reorganization for the company last week, one day before Grand Union was scheduled to file a revised plan with a Delaware bankruptcy court.It remains to be seen whether the bankruptcy judge will accept the creditors' filing, since Grand Union is still within the 180-day period during

Creditors Offer Grand Union Plan

WAYNE, N.J. -- A group of creditors of Grand Union Co. here submitted its own plan of reorganization for the company last week, one day before Grand Union was scheduled to file a revised plan with a Delaware bankruptcy court.

It remains to be seen whether the bankruptcy judge will accept the creditors' filing, since Grand Union is still within the 180-day period during which it has exclusivity to file a reorganization plan.

Grand Union, which operates 236 stores in six Northeastern states, filed for Chapter 11 protection on Jan 25. It submitted its original plan of reorganization on Feb. 6.

While Grand Union officials declined comment last week on details of their revised plan, the creditors said their own plan calls for holders of senior notes to receive new unsecured senior notes in the principal aggregate amount of $595.5 million that will begin accruing annual interest of 12% on Sept. 1. The plan also calls for vendors to receive full and prompt payment.

Industry sources told SN the two reorganization plans are identical except for a section on the scope of indemnification by the chain's current management.

In the company's reorganization plan, outgoing executives would be indemnified for all potential legal liabilities, while the creditors' plan proposes something less than total indemnification, observers said.

A resolution to Grand Union's restructuring efforts could be slowed by a group of creditors that hold zero-coupon bonds in the chain's parent company, Grand Union Holdings Corp., who are not slated to receive any compensation in the proposed reorganization.

A U.S. District Court judge in Delaware last week reversed an earlier ruling by the U.S. Bankruptcy Court in Wilmington, Del., thereby allowing the zero-coupon bondholders to be heard in the Grand Union case.

Giant Food Reports Volume Growth

LANDOVER, Md. -- Giant Food here reported sales increases for the fourth quarter and year ended Feb. 25.

Sales for 16 weeks were $1.2 billion, up 3.9% from sales of $1.16 billion the prior year.

Sales for the year were $3.69 billion, up 3.6% from sales of $3.57 billion the previous year.

Giant Food said same-store sales increased 0.9% for both the quarter and for 52 weeks.

The 161-store food and drug chain disclosed its 1994 sales performance in a preliminary report. The company anticipates issuing full operating results for the year on March 28.

Eagle Said to Seek Leaseback Deal

MILAN, Ill. -- Eagle Food Centers here is attempting to enact a sale-leaseback of 14 stores in an effort to raise cash, according to trade reports.

While chain officials declined comment, trade observers told SN they expect Eagle to close a sale-leaseback transaction by early May.

A sale-leaseback would enable the chain to raise approximately $40 million, observers noted -- funds that would help Eagle meet financial covenants in its bank credit agreements. According to one securities analyst, if Eagle can complete a sale-leaseback transaction, "[it] should be able to improve its liquidity and negotiate a new credit agreement, which will enable it to improve its buying practices."

QFC Completes Olson's Deal

BELLEVUE, Wash. -- Quality Food Centers here said it has consummated its previously announced merger with Olson's Food Stores, Lynnwood, Wash.

The transaction included 752,941 shares of QFC common stock, valued at $19 million, plus $18 million in cash and the assumption of $24 million in long-term debt.

The deal adds 12 Olson's units to QFC's store base; QFC now operates 57 supermarkets.

As reported, the merger with Olson's will enable QFC to strengthen its hold on second place in the Seattle area by increasing its market share from 13.5% to 18.5% (including Olson's 5% share). Safeway, with a 27% share, continues as the market-share leader.