Court Approves A&P’s Plan to Exit Chapter 11
U.S. Bankruptcy Judge Robert D. Drain of the U.S. Bankruptcy Court in the Southern District of New York granted permission for Great Atlantic & Pacific Tea Company’s (A&P) reorganization plan, clearing the way for the grocery store operator to exit Chapter 11 protection after more than a year.
The approval comes after the company secured $490 million in financing from Yucaipa Cos. Judge Drain overruled objections to the plan, including one from the company’s unsecured creditors who will get nothing under the current plan, a Dow Jones Daily Bankruptcy Review article said.
A&P tried to get its plan confirmed in early February, but objections and the inability to secure exit financing prevented the company from doing so.
The article noted that it was only after the company reworked the deal led by J.P. Morgan Chase and Credit Suisse that will now provide $645 million from $750 million. The new plan gives equal footing to all senior lenders but gives nothing to unsecured creditors that originally would have received about $40 million. Those unsecured creditors could get something in the future if the company is purchased in the next five years, the article said.
Previously on abfjournal.com: