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The U.S. Bankruptcy Court for the Southern District of New York has approved The Great Atlantic & Pacific Tea Co.'s (A&P) first-day motions, enabling the grocer to run its business and serve customers during the Chapter 11 process.
Among the motions approved, the court has granted A&P immediate access to $50 million of the $100 million debtor-in-possession (DIP) financing provided by New York-based Fortress Investment Group. The financing will allow the company to keep operating its stores and paying its suppliers, vendors and employees.
As PG reported previously, Montvale, N.J.-based A&P is set to sell about 120 stores, and will continue to unload assets throughout the Chapter 11 process. Ahold USA's Stop & Shop banner has already revealed that it's purchasing 25 of the chain’s New York metro-area locations, while Albertsons' Acme Markets plans to acquire 76 in six states. A&P has also decided to shutter 25 underperforming stores in the near future. All asset and store sales will be conducted through a court-supervised sale process, subject to court approval and certain other conditions, and could include a credit bid for certain assets to be purchased by A&P's current investors, which include Ron Burkle's Los Angeles-based Yucaipa Cos. Yucaipa helped A&P restructure its business the last time it emerged from Chapter 11 bankruptcy, in March 2012.