Fairway has emerged from bankruptcy after filing for Chapter 11 in early May, according to a court filing this week. Althjough one of the New York metro-area grocer’s 15 stores will close, a location in Lake Grove on Long Island, Fairway is still on track to open a store in Brooklyn, N.Y., later this year.
The grocer’s senior lenders voted for a plan to swap their loans for common equity and $84 million of debt of the restructured company. Further, the grocer secured $55 million in financing from some of its creditors to aid its reorganization, as well as to fund the daily operation of its business.
Fairway also now has a new board of directors, among them former Whole Foods Market executive Errol Schweizer, Rite Aid President Ken Martindale, and James Demme, a senior adviser at New York-based Angelo, Gordon Acquisition Corp., whose supermarket experience spans A&P, Bruno’s, Homeland Stores and Shaw’s.
A consortium including Blackstone Group’s GSO Capital Partners is succeeding Sterling Investment Partners as Fairway’s owner. In 2007, Westport, Conn.-based Sterling acquired Fairway for $150 million and tried to expand Fairway across the region, but stiff competition from the likes of Whole Foods and Trader Joe’s stymied the plan. The company went public in 2013, but continued to lose money, and last year offered itself for sale, but there were no takers.