WHITE PLAINS, N.Y. — The U.S. Bankruptcy Court here has approved A&P's Chapter 11 exit plan, and the company could emerge from bankruptcy as soon as this week, reports said Monday.
The company filed Chapter 11 in December 2010 and has since shuttered dozens of stores.
As previously reported, the reorganization plan includes $490 million in debt and equity financing from Yucaipa Cos., the Ron Burkle-led investment group that has a long history of investments in food retailing. A&P also renegotiated its labor contracts late last year to reduce its costs and to prepare to emerge from bankruptcy. Bankruptcy Court Judge Robert D. Drain was quoted in a Dow Jones report on Monday saying that the contract cuts were “very painful” to the unions.
According to the Dow Jones and other reports, a $40 million fund to pay unsecured creditors will not be part of the reorganization plan, but those creditors could be repaid if the company is acquired within five years for a large enough sum.
A spokesowman for A&P confirmed that the court had approved its reorganization plan and that it was "taking the necessary steps to emerge from Chapter 11 as soon as possible."
A&P had an estimated $6.7 billion in sales for the fiscal year that ended Feb. 25, operating 336 stores under the A&P, Pathmark, Food Emporium, Waldbaum's Food Basics, Super Fresh and Best Cellars banners.