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A&P Files For Chapter 11 Reorganization

From a selectively discreet Associated Press:

Grocer A&P files for Chapter 11 reorganization

By Sarah Skidmore, AP Food Industry Writer Sun Dec 12, 2010

PORTLAND, Ore. – The Great Atlantic & Pacific Tea Co., once the nation’s largest grocer, has filed for Chapter 11 bankruptcy protection as it struggles with enormous debt and increased competition from low-priced peers.

The 151-year-old company, based in Montvale, N.J., operates 395 stores around the Northeast under the A&P, Waldbaum’s, The Food Emporium, Super Fresh, Pathmark and Food Basics grocery stores banners.

For the record, in 1930, at the height of the Great Depression, the A&P had 16,000 stores.

The filing was widely anticipated. The company — known to most as A&P — has been bleeding red ink for some time. According to the filing submitted late Sunday in bankruptcy court in White Plains, N.Y., the company listed total debts of more than $3.2 billion and assets of about $2.5 billion.

If it were a federal bureaucracy this would be considered being fiscally responsible.

A&P, like most grocers, is struggling with the weak economy, reduced spending by consumers and intense competition. The company said aggressive competition from non-traditional food retailers like warehouse clubs, discount chains such as Wal-Mart Stores Inc., and dollar stores have compounded the problem.

Would those be non-union stores?

The company reported revenue of $9.5 billion in 2008, which fell to $8.8 billion in 2009. And while the 2010 fiscal year is still under way, in its most recent quarter A&P reported that its net loss had doubled as revenue continued to sink

Don’t people have to eat even during a recession? Besides, we’ve been assured by Ms. Pelosi herself that unemployment benefits are the best stimulus for the economy. And surely most unemployment money goes to buying food.

And of course the A&P accepts food stamps.

It is also struggling with pension costs, the weight of "dark" stores, where it has stopped operating but is still responsible for the lease and a contract with C&S Wholesale Grocers Inc., which provides the majority of its inventory, which it has been unable to negotiate down to lower costs.

Oh, so we finally hear about "pension costs," but only in passing – and only seven paragraphs into the article. By the way, notice that the word union does not appear anywhere in this AP story.

In fact, most of the employees of the A&P belong to the United Food and Commercial Workers Union. A&P employees also make no contributions for their health coverage. But why bring up such minor details?

According to the filing, A&P has secured $800 million in debtor-in-possession financing through J.P. Morgan Chase & Co. and will continue to focus on its turnaround plan while under bankruptcy protection. The company has brought in new management, sold 32 underperforming stores since this summer and drastically cut costs. The grocer said it could not complete this process without the protection…

Germany’s Tengelmann Group is A&P’s largest shareholder with about 42 percent of its stock. Activist investor Ron Burkle of the Yucaipa Cos. investment firm is also a large holder.

Notice that the Associated Press refrained from noting that Mr. Burkle is a major Democrat fundraiser, who gives millions of dollars to the DNC and their candidates — especially Hillary Clinton. (He raised over $1 million for her Presidential campaign.)

Nor does the AP bother to mention that Bill Clinton works for Yucaipa. If one can call what he does ‘work.’

So where is their concern for all the ‘little people’ who are going to lose their jobs and healthcare benefits under this re-organization? (Just kidding, of course.)

This article was posted by Steve on Monday, December 13th, 2010. Comments are currently closed.

6 Responses to “A&P Files For Chapter 11 Reorganization”

  1. proreason says:

    They are ripe for nationalization.

    A&P can be our first Affirmative Action grocer.

    They mean well.

    And what is more important anyway? Lifetime pensions for stockers and checkers, or filthy profits?

  2. GetBackJack says:

    And debt continues to work its filthy sorcery.

  3. Rusty Shackleford says:

    A&P should be deemed “too big to fail” if for no other reason than to allow it to continue to provide high prices and bad service. Perhaps, if bailed out they can then make it the first national tofu mega-store and keep dumping taxpayer money into it for the next 30+ years, even though only .00005% of the population will shop there. Yes, a national grocery store, free from trans fats, hot dogs, ketchup and anything that tastes like food. Yay!

  4. Reality Bytes says:

    Just in time to default on their flag ships’ stores mega million renovations, no doubt.

    “We’re America’s Contractors!”

    We Are Small Enough Too Fail!”

    Brought to you by the SEIU, AFL-CIO, ABA, MoveOn.org, The American Civil Liberties Union, UAW

    Co Sponsored by The United States Congress “Putting Your Money Where Our Mouth is for Over 85 Years!”

  5. U NO HOO says:

    Bitter news to me personally, many years ago I had (platonic) relationships with A&P. And we used to shop at an A&P in Canada but last summer it had a different name. Change is constant.

  6. Liberals Demise says:

    Ripe for Stimulus Takeover by the Den of dingleBarrys.
    “More shovel ready jobs for Americans!!”

    God………I can’t wait any longer!”

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