How Chapter 11 Saved the A&P

Posted on September 5, 2013 at 11:29am by

For many years, the Great Atlantic & Pacific Tea Co. was one of the largest and most easily recognized grocery chains in the nation. More commonly known as the A&P, the company has been through some difficult times recently and may now be up for sale.

The company filed for Chapter 11 bankruptcy protection in 2010 and has made progress in paying off its debts while remaining in operation. In fact, it is estimated that the company is now worth upwards of $1 billion following its emergence from Chapter 11. Chapter 11 bankruptcy allows a company to reorganize its business and reduce its debts while remaining in operation.

Recently, in many areas of business, the downturn in the economy and the growth of competitors offering goods at discount prices has taken its toll. In many cases, a business may elect to go into Chapter 11 bankruptcy in order to get some relief from creditors while making debt settlement arrangements and avoiding liquidation. Chapter 11 bankruptcy allows a company to reorganize its business, assets and debts. Because the company continues its regular business operations during this time, a company emerging from Chapter 11 may be stronger financially that it was before the bankruptcy filing.

There are many reasons why a business may find it is overextended or unable to meet all of its debt obligations. Chapter 11 bankruptcy can give a business the flexibility to make repayment agreements and settle its debts, often on more favorable terms for the debtor. As experienced Kansas City bankruptcy attorneys, The Sader Law Firm can review your company’s financial situation and advise you on your legal options and whether or not bankruptcy is the right option for you.