Tops Markets, a supermarket chain that has had a presence in Massachusetts and other states, recently determined that its financial situation warranted taking drastic action. It thus decided to file for Chapter 11 bankruptcy. The move comes as many consumers move toward more non-traditional grocery retailers.
According to court papers, the company’s chief restructuring officer said that the purchase of the business that occurred in 2007, followed by transactions by the private equity arm of Morgan Stanley, caused the company to become saddled with large debt amounts. The grocery store chain has also been in a war with a union over a pension fund for over four years now. The union apparently claims that the grocery chain owes more than $180 million. The amount owed is reportedly in connection with the company’s purchase of a logistic business and food wholesaler.
In light of the company’s financial struggles, restructuring its balance sheet is its goal. The supermarket chain operates about 170 supermarkets that will remain open as it navigates its bankruptcy case. It employs over 14,000 people, with most of them belonging to unions.
Companies in Massachusetts and elsewhere sometimes end up with more liabilities than assets for a range of reasons, including a weak economy or changing consumer demand. In such a situation, a struggling business owner may choose to file for Chapter 11 bankruptcy protection. This type of bankruptcy filing may help the business owner to get back on track financially and thus increase his or her chances of experiencing unprecedented success in the years ahead.
Source: marketwatch.com, “Tops Markets Files for chapter 11 bankruptcy protection“, Katy Stech Ferek, Feb. 21, 2018