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Price Chopper has dropped its offer to purchase 22 P&C supermarkets owned by the bankrupt Penn Traffic Co., according to published reports. Golub Corp., which owns and operates 120 stores under the Price Chopper banner, additionally won’t sue Penn Traffic over a binding contract it allegedly signed to purchase the locations in central New York, Vermont, New Hampshire and Pennsylvania for $54 million.
Penn Traffic’s creditors and other interested parties are backing a bid from Williamsville, N.Y.-based Tops Markets, LLC, which offered $85 million for all 79 of Penn Traffic’s stores, in addition to $70 million in financial incentives. The offer was made a few weeks after the Golub Corp. had signed a contract with Penn Traffic to purchase the 22 stores.
Spokeswoman Mona Golub told Progressive Grocer that that Golub Corp. had approached Penn Traffic with a "private offer" rather than a formal bid for the locations, and that the Price Chopper operator had now decided not to pursue the purchase.
Neil Golub, president and CEO of Schenectady, N.Y.-based Golub, was succinct in explaining why his company wouldn’t sue. “It's not worth it,” he told the Albany, N.Y., Business Review. A contract with a company that has declared bankruptcy isn’t final until a judge has approved it, and in the meantime, another company could put in a formal bid first, as happened in this case.
In a separate development, a group of Penn Traffic employees are putting together an employee stock ownership plan to acquire the grocery chain’s 79 stores, delaying a scheduled auction of the company’s assets. Despite the eleventh-hour offer, U.S. Bankruptcy Court Judge Peter Walsh is expected to formally award the Tops bid at a Jan. 25 hearing. If it goes through, the deal is expected close Jan. 28.
In November, Syracuse, N.Y.-based Penn Traffic filed for Chapter 11 bankruptcy for the third time in a decade.