A&P (GAP) Files Bankruptcy
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Following some speculation to the cause last Friday, The Great Atlantic & Pacific Tea Company, Inc. (A&P) (NYSE: GAP) confirmed the talk with a release yesterday, in which GAP filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the Southern District of New York.
According to the release, A&P will continue to conduct its business and serve customers at its 395 stores. The Chapter 11 process is in effect to support the financial and operational restructuring of the company.
Additionally, A&P will have access to $800 million in debtor in possession (DIP) financing. A hearing to approve a portion of the financing will be held today.
Key items that the company plans to implement in the restructuring include:
The news comes following rumors surrounding the event last Friday, which caused shares to drop so far that they are still halted from trading.
Shares ended Friday 67% lower before the halt, and no time has been set aside for a continuation of trading.
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According to the release, A&P will continue to conduct its business and serve customers at its 395 stores. The Chapter 11 process is in effect to support the financial and operational restructuring of the company.
Additionally, A&P will have access to $800 million in debtor in possession (DIP) financing. A hearing to approve a portion of the financing will be held today.
Key items that the company plans to implement in the restructuring include:
- A completely new management team is in place;
- Reducing structural and operating costs;
- Improving the A&P value proposition for customers; and
- Enhancing the customer experience in stores.
The news comes following rumors surrounding the event last Friday, which caused shares to drop so far that they are still halted from trading.
Shares ended Friday 67% lower before the halt, and no time has been set aside for a continuation of trading.
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