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NEW YORK -- Penn Traffic Co. announced Friday that it's seeking bankruptcy court permission to sell nine Ohio stores as it restructures under bankruptcy protection, according to Reuters. Syracuse, N.Y.-based Penn Traffic plans to sell the stores by mid-December in a transaction valued at about $46.75 million.
The company is asking the court to approve a sale of seven Big Bear supermarkets to Giant Eagle, Inc.; one store to Needler Enterprises, Inc.; and another store to Bob Bay & Sons Co. Kroger's offer to buy 11 Big Bear stores was rejected, according to a Penn Traffic press release.
In May Penn Traffic requested Chapter 11 protection from creditors after battling rocketing business expenses and competition from such low-price competitors as Wal-Mart.
The sale of the stores has to be approved at a confirmation hearing, which, according to a Dec. 5 Giant Eagle memo to its employees, will be held Dec. 11. The transaction doesn't include the stores' product inventory, which will be sold in liquidation sales managed by third parties beginning on or about Dec. 12, the memo said. After the store inventory liquidation sales are over, the memo said that Giant Eagle will temporarily close the ex-Big Bear stores to permit it to complete the first phase of remerchandising and restocking.
The memo went on to say that pharmacies will stay open during the remerchandising period. Giant Eagle will take ownership of the Big Bear pharmacy customer files right after the bankruptcy court gives its approval, and will serve those pharmacy customers at the existing Big Bear locations throughout the period of transition, according to the memo.