SCHENECTADY, N.Y. — Price Chopper here filed a lawsuit against Penn Traffic Co. this week alleging breach of contract after a bankruptcy judge approved the sale of Penn Traffic to Tops Friendly Markets, Williamsville, N.Y., according to reports.
The sale of all 79 stores operated by Syracuse, N.Y.-based Penn Traffic to Tops for $85 million plus additional considerations is expected to close Friday. Price Chopper had reached an agreement with Penn Traffic to buy 22 of its P&C locations for $54 million soon after Penn Traffic filed for bankruptcy protection in November.
According to reports, Price Chopper in its suit is seeking $1.6 million in damages, described as a “break-up fee” for Penn Traffic’s cancellation of its agreement. Neither Penn Traffic nor Price Chopper could be reached for comment Thursday. Tops also was not available for further comment.
Neil Golub, chief executive officer, Price Chopper, previously told SN he thought a lawsuit would be a “waste of time and effort” after local reports said the company did not intend to file a suit. “The reality was we had a contract with Penn Traffic,” he told SN before the suit was reportedly filed.
Separately, Penn Traffic this week filed an operating statement with the bankruptcy court, listing total negative cash flow — including bankruptcy-related expenses — totaling $4.48 million for the four-week period from Nov. 29 to Dec. 26 of last year, or roughly its first month in bankruptcy. Before bankruptcy expenses, the operating cash flow loss was $2.33 million. Revenues for the period, including both cash-register sales and proceeds from store closures and sales, totaled $65.28 million.
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