Syracuse (WSYR-TV) – Penn Traffic sent letters to several communities in Central and Western New York today, telling them local stores would close by February unless financing or a buyer for the stores is found.
Letters were sent to leaders in several communities with either P&C Stores or P&C facilities.
“The Penn Traffic Company regretfully anticipates that it will discontinue permanently its operations at [store location],” the letter said.
Lawyers for Penn Traffic, the parent company of P&C grocery stores, were in bankruptcy court in Wilmington, Delaware Thursday. Court documents show the company has assets of $150 million, while it owes $137 million. The company wants permission to sell its P&C stores, otherwise it will be forced to close them.
“Over the past few weeks, Penn Traffic has experienced a combination of declining sales, loss of market share, tight credit markets, upcoming expiration of its current credit arrangements, and liquidity-restricting actions by its lenders that make the company’s future uncertain,” the company said in the letter NewsChannel 9 has obtained.
“Penn Traffic has been and continues to be actively working with its current leaders and pursuing other potential sources of capital and/or financing, as well as sale offers, in an effort to infuse enough capital into the business and stores to avoid a closing or shutdown before at least 90 days from the date of this notice.”
Penn Traffic employs 5,700 workers.
NewsChannel 9’s Tanja Babich is covering this story. Stay with on the air and online for updates.
Penn Traffic files for bankruptcy
November 18, 2009
Fayetteville (WSYR-TV) - The parent company of P&C grocery stores is expected in court Thursday after filing for Chapter 11 bankruptcy Wednesday afternoon. The company owes its creditors more than $137 million.
According to court documents, the company is blaming the economic downturn, recent legal trouble and a recent SEC investigation for its problems. They also say competition with other grocery stores, gas stations and pharmacies has gotten tougher.
With permission from the court and its lenders, Penn Traffic plans to sell all of its stores and assets. If that falls through, stores will close. That's a prospect many here have been talking about.
“My dad told me to kind of look for more jobs and I asked why,” said Patrick Benson who works at P&C in Fayetteville. “He told me my store was having some trouble and when I came to work today I found out why.”
There are 5,700 employees working for Penn Traffic. Benson says there are hushed conversations inside the store about the bankruptcy. Even customers have picked up on them. “I was wondering if something happened,” said frequent shopper Nick Lore. “You see a lot of cars but when you walk in its pretty quiet.”
At some stores the aisles are not the only things that are empty, the shelves are too. “I was looking for paper towels,” said shopper Irene Bahouth. “As I came to reach for them I saw there was nothing in back but that one row.”
For the meantime, customers should know P&C is still honoring gift cards and gift certificates. “Our P&C, Quality and BiLo supermarkets remain open for business to serve our customers and communities,” President and Chief Executive Officer Gregory J. Young said. “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.”
The Penn Traffic Company owns and operates supermarkets under the P&C, Quality and BiLo trade names in Upstate New York, Pennsylvania, Vermont and New Hampshire.
Full news release from the company
SYRACUSE, N.Y.--(
BUSINESS WIRE)--The Penn Traffic Company (OTC: PTFC) and its primary subsidiaries filed voluntary petitions for protection under Chapter 11 of the U.S. Bankruptcy Code on November 18, 2009
In order to ensure sufficient liquidity to maintain ongoing operations in the face of current lender defaults, Penn Traffic’s board of directors determined that the interests of the company’s creditors and other stakeholders would be best served by seeking Chapter 11 bankruptcy protection to facilitate an orderly sale of its stores and other assets with the consent of its senior secured lenders.
“Our P&C, Quality and BiLo supermarkets remain open for business to serve our customers and communities,” President and Chief Executive Officer Gregory J. Young said. “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.”
The company will continue to manage its properties and operate as “debtors-in-possession” under the jurisdiction of the U.S. Bankruptcy Court for the District of Delaware and in accordance with the applicable provisions of the Bankruptcy Code.
In connection with the petition, Penn Traffic filed a motion seeking the Bankruptcy Court’s approval of, among other things, a consensual cash collateral arrangement with its senior secured lenders to allow it to have sufficient liquidity to maintain normal business operations during the sale process. The Company expects to present this arrangement to the Bankruptcy Court for approval at a court hearing anticipated for Thursday, November 19, 2009.
Vendor partners, other creditors and other stakeholders may obtain additional information related to this announcement later today at
www.donlinrecano.com/penntraffic.
