Fairway Market files for bankruptcy; to sell all stores
Fairway Market has filed for bankruptcy for the second time in four years.
The legendary, 87-year-old New York grocer said it filed for Chapter 11 bankruptcy protection to complete its strategic sale process. The announcement came just hours after Fairway denied a published report that it planned a complete liquidation via a Chapter 7 bankruptcy filing.
Fairway said it has entered into a stalking horse asset purchase agreement with Village Super Market to sell up to five New York City Fairway stores and its distribution center for approximately $70 million. Fairway currently operates 14 stores.
“We appreciate that Fairway's loyal customers are concerned about the future, and if we are successful in our bid, we are committed to keeping Fairway, including its name, unique product selection and value, a part of this community," said Robert Sumas, CEO of Village Super Market, which operates supermarkets and specialty markets in the Northeast under the ShopRite and Gourmet Garage banners.
In addition, Fairway will execute a court supervised sale process to continue to negotiate for the sale of its remaining store locations. An ad hoc group of the company's senior lenders have agreed to provide the company with up to $25 million in debtor in possession financing.
"After careful consideration of all alternatives, we have concluded that a court-supervised sale process is the best way to meet our objectives of preserving as many jobs as possible, maximizing value for our stakeholders, and positioning Fairway for long term success under new ownership." said Abel Porter, CEO, Fairway Market.
Fairway Market said it continue to conduct business as usual at its stores across the tristate area and expects no interruption in service during the court-supervised process.
Fairway previously filed for Chapter 11 in 2016, three years after its IPO.