Tops Strikes Employee Pension Deal as it Preps to Emerge From Bankruptcy
Tops Markets LLC has come to a pension agreement with the United Food & Commercial Workers (UFCW) union Local One, potentially clearing a significant hurdle in its emergence from bankruptcy, according to a published report in The Buffalo News, which noted that the pension issue “had become a significant drain on the company’s finances.”
The agreement in principle, which would mean lower pension payments in the long run, must be approved by union members, who will vote on it early next month, and the U.S. Bankruptcy Court, however.
“We are pleased to have reached an agreement in principle,” Tops spokeswoman Kathleen Romanowski told the newspaper. “It represents an important milestone in our financial restructuring efforts.”
Under the agreement, Tops said it would cut funding for the retention bonus program created to compensate 115 managers and executives for not leaving their jobs through the end of the year. Although the UFCW is opposed to any retention bonuses, the grocer contended that they are necessary to keep employees with hard-to-replace skills and expertise from departing the company at an uncertain time, adding that several key employees who would have been eligible for such bonuses had already left or had given their notice.
In May, the grocer settled a pension dispute with about 600 Teamsters members employed at its Lancaster, N.Y., warehouse.
Beyond the pension settlements, Williamsville, N.Y.-based Tops must identify its underperforming stores and figure out which it will close, and to reach a deal with its secured creditors, who control most of the company’s $700 million-plus in debt, that would swap that debt for an ownership stake in the restructured business.
Tops previously said that about one out of eight of its stores was underperforming and at risk of closing, although it has since entered into negotiations with some of its landlords to lower its lease payments and make those locations more financially viable.
The grocer had originally aimed to emerge from bankruptcy by August, but has asked the bankruptcy court to give it until late December to complete the restructuring process. Tops originally filed for Chapter 11 bankruptcy protection last February.
Tops was No. 28 in Progressive Grocer’s 2018 Super 50 list of the top grocers in the United States.