SYRACUSE --

In a statement released to the media, the company says that the interests of its creditors and stakeholders would be best served by seeking bankruptcy protection. The company says it will be selling off its stores and other assets with permission of some of its lenders, but will continue to operate its stores and properties as ‘debtors-in-possession’ and does not plan to close any area markets during this reorganization period. The company did not comment on future plans, however.

“Our P&C, Quality, and BiLo supermarkets remain open for business to serve our customers and communities,” said Penn Traffic President and CEO Gregory Young.

As Penn Traffic tries to sell some of its assets, there is no guarantee stores will stay open. The P&C in Canonize is the only grocery store for miles, a place where Karl Schnitzler comes a few times a week. He's not surprised to hear that Penn Traffic has filed for bankruptcy protection. He just wants to know what it will mean for this store. Schnitzler says, "Hopefully they will be able to come out of it again. Several companies have filed bankruptcy more than once and have come back out of it, again, this is the only grocery store in town, so it would be a shame if it wasn't here."

Penn Traffic also filed a motion seeking the bankruptcy court’s approval to make arrangements to have enough cash on hand to continue to ‘maintain normal business operations’. The company says it expects to present its plan to the court at a hearing scheduled for Thursday. Action News has obtained court papers showing the company has about $150 million in assets, and owes around $137 million. Penn Traffic is requesting to pay wages for employees and keep the utilities on during the reorganization.

Larry Bennett, a professor of entreprenurial practice at Syracuse University's Whitman School of Management, says bankruptcy protection will allow Penn Traffic flexibility they wouldn't have otherwise. He also says that during this period, Penn Traffic will look for new investors, possibly even a buyer. "Under this reorganization, it will allow them some flexibility that they wouldn't have outside of bankruptcy to perhaps look at some businesses that aren't performing as well. There may be some that are either eased out or some that are sold off, they might be a better fit with one of the other grocery stores than the Penn Traffic chain," said Bennett.

Penn Traffic operates supermarkets under the P&C, Quality, and BiLo brand names in New York, Pennsylvania, Vermont, and New Hampshire. The company employs approximately 4,000 workers. It had previously filed for bankruptcy protection in 2003.