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Penn Traffic files bankruptcy to sell stores and other assets
By Caroline Salls
Pittsburgh, Nov. 18 - The Penn Traffic Co. and its primary subsidiaries filed for Chapter 11 bankruptcy Wednesday in the U.S. Bankruptcy Court for the District of Delaware to complete a sale of its stores and other assets and ensure sufficient liquidity to maintain ongoing operations in the face of current lender defaults, according to a company news release.
"Our P&C, Quality and BiLo supermarkets remain open for business to serve our customers and communities," president and chief executive officer Gregory J. Young said in the release.
"We intend to continue to work closely with our vendor partners to provide the fresh products and good value that our customers have come to expect from our stores."
In connection with the filing, Penn Traffic has requested court approval of a consensual cash collateral arrangement with its senior secured lenders to allow it to have sufficient liquidity to maintain normal business operations during the sale process.
According to an 8-K filed with the Securities and Exchange Commission, Penn Traffic has $150.4 million in total assets and $136.9 million of total debt.
The company did not list any unsecured creditors with claims of $1 million or more.
The bankruptcy filing constitutes an event of default under the company's revolving loan agreement and supplemental loan agreement, according to the 8-K. However, Penn Traffic said the defaults are covered under the automatic stay imposed by the bankruptcy filing.
Penn Traffic is a Syracuse, N.Y.-based company involved in retail and wholesale food distribution. The Chapter 11 case number is 09-14078.
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