MONTVALE, NJ - The A&P bankruptcy saga continues, this time with court filings revealing the retailer's millions of dollars a week in losses, as well as the commanding judge requiring a deadline for today to resolve disputes with labor unions.
A&P, which filed for bankruptcy just last month, has now said it’s “burning cash at a rate of $4.5 million a week,” as it seeks permission from courts to sell 118 of its 301 stores.
A&P’s Financial Adviser, Tim McDonagh, admitted in a filing to courts that “the gap between the debtors’ assets and liabilities is widening,” with the most recent data showing the company has about $1.6 billion in assets, and liabilities reaching as high as $2.3 billion.
Retailers Acme, Stop & Shop and Key Food have all already submitted bids totaling nearly $570 million to buy A&P’s 118 stores, but as we’ve mentioned in a previous story, each company has included prohibitions on “bumping,” or where workers at stores that close could end up displacing workers with less seniority at the stores that will remain open under new owners.
According to news source NorthJersey.com, Judge Robert Drain has given A&P and its unions until this afternoon to resolve disagreements over severance pay and the rights of senior workers to “bump,” but the retailer is still requesting relief from both severance pay and seniority rights provisions in collective bargaining agreements, arguing that the relief was necessary to facilitate the sale of some of its stores and appease creditors as it winds down operations.
“Please sharpen your pencils and see if you can reach an agreement,” Judge Drain told both sides during the hearing. “There is a lot of talent here on both sides so I think you can do that.”
McDonagh, also a Managing Director at FTI Consulting Inc., added that if A&P had to conduct a “fire sale” to liquidate those stores, instead of selling them under the negotiated purchase agreements, the proceeds would be about $213 million less.
Stay tuned as AndNowUKnow continues to update you on all developing A&P news.
