Supermarket chain files Chapter 11

Struggling Marsh Supermarkets is looking for a buyer, but it doesn’t have all that much time.



The 86-year-old grocery store chain on Thursday filed for Chapter 11 bankruptcy protection, and said it is seeking a buyer for all or part of its business. The company’s 44 locations will continue normal operations throughout the process. But the stores will be shuttered if the company does not find a buyer within 60 days.



"While today's decision was extremely difficult, we believe this action is necessary to preserve the value of the business as we seek a sale," said CEO Tom O'Boyle. "After reviewing every alternative, we concluded that Chapter 11 clearly provides the most effective and efficient means to ensure the best recovery for the company's stakeholders."



The company has retained Peter J. Solomon Company as the investment bank to market its assets. It has asked the U.S. Bankruptcy Court's permission to use its available cash to fund operations, since Marsh’s secured lenders have already agreed to allow it to do so, according to Marsh.



Marsh Supermarkets was founded in Muncie, Indiana, in 1931 by Ermal Marsh. The Marsh family sold the company to Sun Capital in 2006.



In recent years, the chain has struggled to compete effectively against larger national and regional chains that have made the Indiana and Ohio grocery marketplace in which it operates extremely competitive.



The crowded environment has led to price-cutting and other forms of promotional activity that have put profit margins under extreme pressure. Earlier this year, Marsh closed 21 unprofitable stores and, in late April, sold its in-store pharmacy business to a subsidiary of CVS Pharmacy.