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Grocery store chain A&P files for bankruptcy again

July 20, 2015, 11:53 AM UTC
A&P Files For Chapter 11 Bankruptcy Protection
JERSEY CITY, NJ - DECEMBER 13: People walk from a A&P supermarket December 13, 2010 in Jersey City, New Jersey. Venerable grocery chain The Great Atlantic & Pacific Tea Company, better known as A&P filed for bankruptcy protection this weekend, under mounting debt and structural problems. The company founded in New York in 1859 owns close to 400 supermarkets in the Northeast under the names of A&P, Pathmark, Food Emporium, Waldbaum's, and others. (Photo by Chris Hondros/Getty Images)
Photograph by Chris Hondros — Getty Images

Storied supermarket chain Great Atlantic & Pacific Tea Co Inc, better known as A&P, filed for Chapter 11 bankruptcy protection for the second time in five years and said it was in discussions with buyers for some of its stores.

The 156-year-old company has hired Evercore Partners, an investment bank that specializes in selling assets. A&P listed assets and liabilities each of more than $1 billion in its bankruptcy filing late Sunday.

The company said was in talks with Acme Markets Inc, owner of Safeway and Albertsons grocery stores, Shop & Shop Supermarket Co LLC and Key Food Stores Co-operative Inc to buy its assets.

A&P has lined up buyers for 120 of its 296 stores with total expected proceeds of about $600 million, The Wall Street Journal reported, citing a person familiar with the matter.

The company, which also owns Best Cellars, Pathmark and Superfresh stores, has been unable to stand up to behemoths such as Wal-Mart Stores (WMT) and Costco Wholesale (COST) who entice customers with big discounts.

At the same time, wealthier shoppers have been lured away by higher-end stores such as Whole Foods Market Inc.

A&P has received debtor-in-possession financing of $100 million from Fortress Credit Corp, court documents show.

The Montvale, New Jersey-based company employs about 34,000, according to its website.
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A&P, which in its heyday in the early 20th century operated over 15,000 stores, first filed for bankruptcy protection in 2010, re-emerging two years later as a private company after obtaining financing from investors including Goldman Sachs and an affiliate of billionaire Ron Burkle.

The company was founded as a mail order business in 1859 by tea and spice merchants George Huntington Hartford and George Gilman. In the same year, it opened its first store-warehouse operation in New York City, according to A&P’s website.

The case is in U.S. Bankruptcy Court, Southern District of New York, Case No: 15-23007.