Judge Approves A&P to Auction 118 Stores
WHITE PLAINS, NY - Yesterday in a White Plains, NY court, U.S. District Judge Robert Drain gave A&P approval to auction off 118 stores and liquidate 25 locations, as well as approving its $100 million bankruptcy loan.
According to Law 360, Judge Drain ruled on the final approval of the bankruptcy and the liquidation of 25 stores, which have already started their going out of business sales. The judge also warned of the possibility of collusion in the auctions as well.
"Given the number of potential bidders and in some cases, their close relationship with each other, parties should be sensitive to the prospect of collusion," Judge Drain said, according to reports from New York news source Lohud. "You're well-advised to raise those concerns.”
Judge Drain warned A&P that he has been involved in other cases in which competitors talked to one another prior to submitting a bid, saying this led to instances of price-fixing. To avoid collusion, Drain will require the winning bidders to pledge in writing they did not communicate with other bidders without prior approval.
A bid deadline has been set for September 11 for the 118 stores that Acme Markets, Stop & Shop and Key Foods have already expressed interest in. In the Lower Hudson Valley of New York, 18 are slated to become Acme's, while another two appear to be headed toward Stop & Shop and Key Foods. But those sales are not final, and A&P is still soliciting bids. If no better bids are received, a sale hearing is scheduled for September 21, Lohud reports.
"We're encouraging parties to get in bids as soon as possible," A&P Lawyer Ray Schrock said.
Lawyer Bradford Sandler, who represents the creditors' committee, added that the best possible outcome for A&P's bankruptcy case will be for its locations to continue operating, and for its workers to have jobs under a new ownership.
A&P’s lawyers have agreed to consider these factors in deciding the "highest and best offer" for A&P stores, but of course there is no guarantee the winning bidder will be a supermarket operator familiar with unionization.