Privately-held Central Grocers (CGI) and 11 affiliated debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware. CGI is the seventh largest grocery cooperative in the U.S. It supplies approximately 400 independent supermarket stores. The stores – including chains like Treasure Island, Pete’s Fresh Market, Angelo Caputo’s Fresh Market and Sunset Foods – have the second largest market share in the Chicago area.

According to bankruptcy court documents, as of the commencement date, CGI owes a lender group led by PNC as administrative agent $200 million under a prepetition revolver which was last amended earlier this year. Additionally, CGI owes a lender group led by Bank of the West serving as administrative agent $22.5 million under a prepetition term loan agreement.

CGI intends to conduct an orderly sale of its Strack & Van Til stores as going concerns and anticipates entering into a sale agreement with a stalking horse bidder in the near future. Central Grocers is also seeking to sell its distribution center in Joliet as it winds down its wholesale distribution operations.

CGI is seeking Chapter 11 relief because of liquidity challenges that precluded the company from investing in new technology and e-commerce that would have allowed them to stave off competition from online giants like Amazon and Google – innovative companies focusing exclusively on food delivery, and modern stores that offer online ordering and delivery services to their customers.