Lenders Give Penn Traffic More Cash -- and Time
Syracuse, N.Y. -- The Penn Traffic Co. has arranged $270 million in additional financing to help get it through its stay in Chapter 11 bankruptcy protection and to repay its key lenders.
The loan was approved Thursday by Judge Adlai S. Hardin, Jr. in U.S. Bankruptcy Court in White Plains.
Penn Traffic, the parent of P&C Foods and other supermarket chains, has been operating under Chapter 11 bankruptcy protection since May 30.
The lenders of the $270 million were identified as Fleet Capital Corp. and "a syndicate of lenders that were lenders to the company prior to the filing of its Chapter 11 petition."
Most of that loan -- $200 million -- is being directed back to the lenders to repay loans they made to Penn Traffic before the company filed for Chapter 11 protection.
The loan will help Penn Traffic "conduct business as usual during the reorganization process," said Joseph V. Fisher, Penn Traffic's president and c.e.o. "We are gratified by the continued strong support of our lenders, which we view as an important vote of confidence in our company, our people, and our potential."
Hardin also approved Penn Traffic's request to extend the deadline for the company to make a decision on what to do with most of its store leases. "The effect of the approval of these motions is to give us more time and more flexibility to complete our business plan and our plan of reorganization," Fisher said. "While we still intend to reorganize and emerge from Chapter 11 as quickly as possible, we also want to make certain that before completing our plans we consider all the options open to us for ensuring that we exit reorganization a stronger, more competitive company."
The loan was approved Thursday by Judge Adlai S. Hardin, Jr. in U.S. Bankruptcy Court in White Plains.
Penn Traffic, the parent of P&C Foods and other supermarket chains, has been operating under Chapter 11 bankruptcy protection since May 30.
The lenders of the $270 million were identified as Fleet Capital Corp. and "a syndicate of lenders that were lenders to the company prior to the filing of its Chapter 11 petition."
Most of that loan -- $200 million -- is being directed back to the lenders to repay loans they made to Penn Traffic before the company filed for Chapter 11 protection.
The loan will help Penn Traffic "conduct business as usual during the reorganization process," said Joseph V. Fisher, Penn Traffic's president and c.e.o. "We are gratified by the continued strong support of our lenders, which we view as an important vote of confidence in our company, our people, and our potential."
Hardin also approved Penn Traffic's request to extend the deadline for the company to make a decision on what to do with most of its store leases. "The effect of the approval of these motions is to give us more time and more flexibility to complete our business plan and our plan of reorganization," Fisher said. "While we still intend to reorganize and emerge from Chapter 11 as quickly as possible, we also want to make certain that before completing our plans we consider all the options open to us for ensuring that we exit reorganization a stronger, more competitive company."