Major grocery chain files chapter 11; sells stores for $600 million

Montvale, N.J. – The rumors are true. As expected, the Great Atlantic & Pacific Tea Company Inc. (A&P) has filed for Chapter 11 bankruptcy.



In a brief statement on its website, privately held A&P says it has secured financing of $100 million and voluntarily filed for chapter. A&P has also entered agreements to sell 120 stores for $600 million and will close more of its 296 stores in the near future.



Buyers of the stores have not been officially identified, but Kroger, Ahold and Acme Supermarkets are among the supermarket chains that were said to be interested in purchasing some A&P-owned stores if a bankruptcy filing took place.



“The vast majority of our stores are operating normally and will be fully stocked during this process,” A&P said in the online statement. “While some stores will close in the near-term, the vast majority will continue providing customers with the same high-quality products and exceptional customer service. We will also continue to honor all existing customer promotional and loyalty programs.”



However, in its official Chapter 11 filing, A&P was not quite so optimistic. The retailer said it has more than 100,000 creditors, as well as more than $1 billion in liabilities and more $1 billion in assets. A&P also said it will sell as many of its stores as possible. This marks A&P’s second bankruptcy filing in a five-year timespan.