WILLIAMSVILLE, N.Y. — Tops Friendly Markets filed for Chapter 11 bankruptcy protection Wednesday and said it had arranged financing to get it through the process.
“We are pursuing a voluntary financial restructuring that will help make us a stronger competitor, said CEO Frank Curci. “All of our stores are open, with no impact on daily operations.”
The filing came less than a week after Bloomberg reported the Williamsville–based grocer was planning to file for bankruptcy protection due to overwhelming debt from leveraged buyouts.
Tops said as much in a news release that explained “it is pursuing financial restructuring in order to eliminate a substantial portion of debt from the company’s balance sheet and position Tops for long-term success.”
The grocery store operator filed for Chapter 11 in the Southern District of New York and said it has received a commitment for $125 million debtor-in-possession financing from an unnamed source and a $140 million debtor-in-possession line of credit from Bank of America to get the company through bankruptcy. Those making debtor-in-possession loans usually get paid back before holders of other debt if reorganization fails.
Tops said it plans to pay vendors and suppliers in full for goods and services provided after the declaration of bankruptcy.
Weil, Gotshal & Manges LLP is serving as legal counsel to Tops, Evercore is serving as investment banker and FTI Consulting, Inc. is serving as restructuring advisor, the company said.
Tops has 169 stores and more than 14,000 employees in the Northeast. It has more than 40 stores in Central New York.
Curci said restructuring will set Tops up for better days ahead. “This will enable us to invest further in our stores, create an even more exceptional shopping experience for our customers and compete more effectively in today’s highly competitive and evolving market,” he said.
Contact McChesney at cmcchesney@cnybj.com
Photo credit: Tops