MONTVALE, N.J. — A&P’s last-ditch effort for additional funding fell short when supplier C&S Wholesale Grocers refused to provide cost concessions, leading in part to the retailer’s Chapter 11 bankruptcy filing, A&P said Monday.
According to documents filed in U.S. Bankruptcy Court in White Plains, N.Y., A&P had a plan in place this fall to expand a credit facility by $200 million that unraveled when it could not negotiate cost concessions from C&S underlying the lending facility. A&P officials appeared confident such a deal could be made while reviewing quarterly financial results in late October.
“Very recently, it became clear that out-of-court efforts to restructure the C&S contract … would not be successful,” A&P said in a filing. “Without these concessions, the entire turnaround plan could not be implemented.”
C&S, based in Keane, N.H., was not immediately available for comment.
A&P also cited a challenging operating environment characterized by declining prices and reduced consumer spending, and legacy costs including dark store leases and pension funds for Sunday’s Chapter 11 filing. It is seeking to reorganize $1 billion in debt. It listed assets of $2.5 billion and liabilities of $3.2 billion.
The company on Monday asked for a series of first-day motions to assure that sales programs continue and employees continue to get paid. It also requested the court to reject more than 73 dark-store leases it estimated would save $77 million in 2011.
