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SYRACUSE, N.Y. -- The Penn Traffic Co. said Friday it has received subpoenas from the U.S. Securities and Exchange Commission requesting documents relating to the regional grocer's promotional and allowance practices and policies.
As Penn Traffic revealed in the disclosure statement for its recently confirmed plan of reorganization, the company is cooperating with the SEC and the U.S. Attorney's office in their probe into these matters and will comply with the subpoenas.
Penn Traffic said its audit committee had launched an internal investigation into these matters, which it has suspended while the government investigations continue. The company said it has placed an employee on leave of absence until the completion of the investigations.
As a result of these ongoing investigations, Penn Traffic noted that it have to delay the finalization and release of its audited financial statements for fiscal years 2003, 2004, and 2005, and that these audited financial statements wouldn't be ready before Aug. 30, the deadline for delivery of such statements in its $164 million revolving credit facility. At the grocer's request, the lenders under its revolving credit facilities have consented to push back the deadline for delivery of the audited financial statements to Dec. 31, allowing Penn Traffic to continue to access fully its working capital facility. As of June 25, Penn Traffic had undrawn availability of about $62 million under this revolving credit facility.
"We regret that the audit of our financial statements cannot be completed prior to the August deadline," said Penn Traffic president and c.e.o. Robert Chapman in a statement, "but we are extremely gratified that our lenders have been understanding in working with us to get past this disruption so that we can achieve the goals we established for our reorganized company and its 9,000-plus employees."