A&P Bankruptcy Plans Face Complications
MONTVALE, NJ - The A&P saga continues. The Wall Street Journal reports that the retailer’s plan to sell 120 stores and close 25 more has hit a roadblock from those that depend on a successful conclusion.
To read Joseph Checkler’s full report, click here.
As we previously reported, the chain announced its intention to file its second bankruptcy in five years, as well as selling or closing more than half of its nearly 300 stores as quickly as possible.
“Great Atlantic & Pacific Tea Co. is facing opposition to its plan to quickly sell or close nearly half of its stores in bankruptcy court, including from landlords and the Pension Benefit Guaranty Corp.,” Checkler wrote.
According to the report, pensions for 25,815 A&P multi-employer plan workers are currently underfunded by $302.5 million, as listed in the PBGC’s filing.
In order to account for the bidder assuming that a portion of pension liabilities would reduce the PBGC’s claim made in the case, the corporation calls for a change in A&P’s auction procedures to “encourage assumption” of pension liabilities by a proposed buyer, the WSJ reported.
“The global bidding procedures should require all bidders to expressly state their intention with respect to the pension plans,” PBGC lawyers said in their filing, according to the report.
A group of landlords for some stores being sold are also wary, with concerns that they will not be properly informed of possible new tenants before next week’s hearing. Checkler wrote that the landlords’ lawyers only request enough time and information, and are currently working with the counselor’s council to make sure their needs are met.
AndNowUKnow will keep you posted on this story as it develops.