Big V Supermarkets Inc. Enters Into Term Sheet with Wakefern Food Corp.
FLORIDA, N.Y. - Big V Supermarkets Inc. said today that, as part of its effort to work with its creditors toward a successful resolution of its chapter 11 case, the company has entered into a term sheet with Wakefern Food Corp., which, subject to the completion of definitive documentation and approval by the bankruptcy court, is intended to form the basis of a plan of reorganization for Big V.
The term sheet provides, among other things, that Wakefern will purchase substantially all of the assets (including leases, equipment and inventory, but not including certain cash and other assets) of Big V in accordance with the terms of a court-approved plan of reorganization to be jointly proposed by Big V and Wakefern. The purchase price would be approximately $150 million, which would include the assumption of certain existing capital lease and equipment financing obligations. Certain accrued liabilities not included in the purchase price would also be assumed by Wakefern, and would be funded by Big V primarily through a transfer of cash and other assets not transferred in consideration of the purchase price.
Big V noted that the total value of the proposed transaction could substantially exceed the $150 million purchase price because Wakefern would also waive certain significant claims it has asserted against Big V. The term sheet also reflects comprehensive agreements between Big V and Wakefern regarding the reconciliation of numerous claims and credits asserted by each of the parties against the other. In addition, the term sheet provides that Big V shall be entitled to receive, subject to certain limited exceptions, the credits and other benefits consistent with membership in good standing in the Wakefern cooperative.
Jim Toopes, president and CEO of Big V Supermarkets, said, "The signing of a term sheet follows intensive negotiations with Wakefern, as well as discussions with two other potential purchasers and representatives of our lenders and other creditor groups. We believe the agreement we have reached with Wakefern provides an appropriate basis for a plan of reorganization that will ultimately provide favorable recoveries for Big V's primary creditor constituents, particularly as compared with other plan alternatives that may be contemplated."
He continued, "We intend to work closely with Wakefern and the other creditor representatives to flesh out the term sheet into a full and fair plan of reorganization worthy of the support of all of our creditors and then to solicit acceptances of that plan as soon as practicable. We are optimistic that this process can be completed in early 2002."
Based in Florida, N.Y., privately held Big V Supermarkets, Inc. owns and operates 31 supermarkets in New York and New Jersey.
The term sheet provides, among other things, that Wakefern will purchase substantially all of the assets (including leases, equipment and inventory, but not including certain cash and other assets) of Big V in accordance with the terms of a court-approved plan of reorganization to be jointly proposed by Big V and Wakefern. The purchase price would be approximately $150 million, which would include the assumption of certain existing capital lease and equipment financing obligations. Certain accrued liabilities not included in the purchase price would also be assumed by Wakefern, and would be funded by Big V primarily through a transfer of cash and other assets not transferred in consideration of the purchase price.
Big V noted that the total value of the proposed transaction could substantially exceed the $150 million purchase price because Wakefern would also waive certain significant claims it has asserted against Big V. The term sheet also reflects comprehensive agreements between Big V and Wakefern regarding the reconciliation of numerous claims and credits asserted by each of the parties against the other. In addition, the term sheet provides that Big V shall be entitled to receive, subject to certain limited exceptions, the credits and other benefits consistent with membership in good standing in the Wakefern cooperative.
Jim Toopes, president and CEO of Big V Supermarkets, said, "The signing of a term sheet follows intensive negotiations with Wakefern, as well as discussions with two other potential purchasers and representatives of our lenders and other creditor groups. We believe the agreement we have reached with Wakefern provides an appropriate basis for a plan of reorganization that will ultimately provide favorable recoveries for Big V's primary creditor constituents, particularly as compared with other plan alternatives that may be contemplated."
He continued, "We intend to work closely with Wakefern and the other creditor representatives to flesh out the term sheet into a full and fair plan of reorganization worthy of the support of all of our creditors and then to solicit acceptances of that plan as soon as practicable. We are optimistic that this process can be completed in early 2002."
Based in Florida, N.Y., privately held Big V Supermarkets, Inc. owns and operates 31 supermarkets in New York and New Jersey.