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At a hearing this week in relation to the Chapter 11 bankruptcy protection sought by the Great Atlantic & Pacific Tea Co. (A&P), the presiding judge issued a warning against collusion as the company sells a large number of its nearly 300 stores, according to a published report. The warning was given because of the number of potential bidders, some of whom have close relationships with each other.
"People should be doing their work above board," noted U.S. Bankruptcy Court Judge Robert Drain at the hearing, held in White Plains, N.Y., as reported in The Journal News in the Lower Hudson Valley. To prevent price-fixing, Drain said he would require winning bidders to pledge in writing that they didn't communicate with other bidders without prior approval.
Finding buyers for the stores is already underway, with a bid deadline of Sept. 11 for the 118 locations in which Acme Markets, Stop & Shop and Key Food have already shown interest. As those sales aren't final, A&P is still accepting bids. If no better offers come in, a sale hearing will take place Sept. 21. At the same time, company officials are soliciting bids for single stores or other combinations.
The creditors' committee, comprising representatives from the United Food and Commercial Workers union, representing A&P's employees; Pension Guaranty Corp., which insures the company's pension plans; and other parties owed money by the grocer, has requested that bids take into account factors other than just the highest price. These include whether the buyer intends to continue operating the store as a supermarket, has similar union collective bargaining agreements in place and will take over control of A&P's pension plans.
A&P, which declared bankruptcy last month, plans to close 25 stores.