Judge approves deal, seals list of stores to close
SYRACUSE -- The judge in the Penn Traffic bankruptcy case is approving the sale of all of the assets of the supermarket chain to Tops Friendly Markets.
Late Monday afternoon the Federal Bankruptcy Court in Wilmington, Delaware approved all aspects of the Tops transaction. Attorneys for Penn Traffic are still assembling the paperwork for the final orders which the judge intends to sign either late Monday or Tuesday morning.
Tops ended this two month process as the sole surviving bidder at a price tag of at least $85 million. The key moment in the success for Tops was its agreement with Penn Traffic that was consummated on January 8th on the day that Price Chopper's deal for a private sale of 22 stores was about to come before Judge Peter Walsh.
"We are very pleased that the court has approved our comprehensive bid, said Frank Curci, Tops' president and CEO. "We look forward to the upcoming closing and the opportunity to bring the Tops Friendly Markets shopping experience to our new neighbors and customers."
The union that represent workers, the United Food and Commercial Workers International Union, released a statement saying, "Thousands of UFCW members are hopeful that today's sale will give them the opportunity to maintain their jobs, their health benefits and pensions. Rebuilding this company is essential to the economic security of our communities, and will require a strong partnership between Tops Market and workers. While the challenges facing our economy capture headlines, this acquisition by Tops is a positive step toward keeping the working men and women of New York and Pennsylvania in good jobs."
Monday's proceedings included Penn Traffic and Tops dealing with several objections from creditors and property owners. Negotiations over these issues stretched the hearings out through the afternoon.
Michael Foreman, an attorney representing Penn Traffic, says Tops is expected to close on the purchase by the end of this week. For the time being the court is keeping sealed the list of stores Tops intends to keep open or closed. That list will be made public over the next several weeks.
Upon hearing the news of the judge approving the Tops deal United States Senator Charles Schumer released this statement saying, "A big thank you goes to Tops, the workers, GE Capital and the many thousands of Upstate New Yorkers who joined in this fight." Schumer entered the negotiation picture in January asking the first secured creditor in the case GE Capital to allow the process more time to bring in more bidders in an attempt to save jobs. Price Chopper CEO Neil Golub later referred to Schumer as a 'shill' for the labor unions after the non-union Price Chopper bid was trumped by the union friendly Tops bid.
Members of the unsecured creditors committee followed today's proceedings carefully. One member of that committee said this deal was "the best possible scenario under the circumstances." It is not known how many cents on the dollar the unsecured creditors will receive, but the Tops deal is expected to give them more than the Price Chopper deal and far more than the original December bid from a group of investors wishing to liquidate the company.
Penn Traffic filed for bankruptcy on November 18th. It owns 79 stores and employs some 5,700 workers. Tops was founded in 1962 and is headquartered in Williamsville in western New York.
