Penn Traffic files for bankruptcy

Syracuse, N.Y. The Penn Traffic Co., parent to P&C Foods supermarkets chain, said late Wednesday it has filed for bankruptcy for the third time in 10 years.

According to a report by the Post-Standard, Penn Traffic plans to sell all or most of its assets, consisting mainly of 79 supermarkets in four states, by Jan. 10, 2010.

Penn Traffic made the announcement Wednesday afternoon, days after troubling flares were sent up to investors and customers in the form of missed loan payments and empty store shelves. The company made the filing in federal bankruptcy court in Wilmington, Del.

Penn Traffic said it plans to continue to operate its stores under court protection from its creditors while it seeks a buyer. It might already have a buyer in mind, considering it has locked in a date.

“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,” said Gregory J. Young, Penn Traffic’s president and CEO.

The company also said it will continue to pay its 5,700 employees, who draw $2.3 million each pay period, and continue benefits, according to documents it filed Wednesday with federal bankruptcy court.

The grocer is expected go before a U.S. Bankruptcy Court judge in Wilmington, where it is incorporated, Thursday. It will seek approval to make arrangements with its lenders for money to operate.