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SYRACUSE, N.Y. -- The Penn Traffic Co. here said yesterday that its board of directors' audit committee had completed an internal investigation finding that Penn Traffic had engaged in improper practices mainly in connection with the premature recognition of promotional allowances, but that those practices had largely ended by the time the company filed for Chapter 11 bankruptcy in May 2003.
The committee also preliminarily found that these improper practices affected the Penn Traffic's earlier reported financial results, and the company may ultimately restate its previously issued financial statements. No decision about restatement will be made, however, until the company completes an assessment of the financial statement impact.
The retailer is currently cooperating with ongoing investigations by the U.S. Securities and Exchange Commission and the U.S. Attorney's Office into its promotional and allowance practices and policies.
Penn Traffic operates 112 supermarkets in Pennsylvania, upstate New York, Vermont, and New Hampshire under the BiLo, P&C, and Quality banners, as well as a wholesale food distribution business serving 79 licensed franchises and 49 independent operators, and Penny Curtiss, a Syracuse-based commercial bakery.