Last updated on June 13th, 2024
Tops Markets LLC announced Feb. 21 that it has filed for Chapter 11 bankruptcy protection and is pursuing a financial restructuring in order to eliminate a substantial amount of debt from its balance sheet. The hope is that the move will position Tops for long-term success.
Tops’ portfolio of stores in Upstate New York, northern Pennsylvania and Vermont—numbering 169 according to recent press releases from the company—are continuing to serve customers with no impact to day-to-day operations, the company says, adding that it fully expects operations to continue as normal throughout the financial restructuring process.
The grocer has received a commitment for a $125 million debtor-in-possession (DIP) term loan financing facility from certain noteholders and a $140 million DIP asset based revolving loan from Bank of America, N.A., which are expected to support the company’s continued operations during the court-supervised restructuring process.
“Tops has built strong market share and our stores continue to distinguish themselves by offering quality products at affordable prices with superior customer service,” said Frank Curci, CEO of the Williamsville, New York-based chain. “We believe the financing that we received from our noteholders is a vote of confidence in our business. Our operations are strong, and we have an outstanding network of stores and a talented team to support them.
“We are now undertaking a financial restructuring, through which we expect to substantially reduce our debt and achieve long-term financial flexibility. This will enable us to invest further in our stores, create an even more exceptional shopping experience for our customers and compete more effectively in today’s highly competitive and evolving market,” Curci added. “We are continuing to provide our customers the convenience, savings and friendly service that they expect from us. Our priorities, values and commitments to our customers and our communities will not change. On behalf of everyone at Tops, we thank our customers for their continued support and look forward to ensuring that their every need is met. I also want to thank our 14,262 employees and associates for their continued hard work and dedication.”
To implement the financial restructuring, the company elected to file for reorganization under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. Tops is working cooperatively with certain holders of more than 65 percent of its senior secured notes due 2022 and is “continuing constructive discussions,” it says.
The company has filed a number of customary motions seeking court authorization to continue to support its business operations during the court-supervised restructuring process, including the continued payment of employee wages and benefits without interruption. The company intends to pay vendors and suppliers in full under normal terms for goods and services provided after the filing date of Feb. 21, 2018. Tops expects to receive court approval for all of these requests.
The company has created a website to post information relating to the restructuring.
Prior to the announcement, the union covering 12,000 Tops workers said it was aware of the finances of Tops Markets and had hired attorneys specializing in bankruptcy filings.
UFCW Local One President Frank DeRiso issued a statement regarding a Feb. 16 report by Bloomberg News that said Tops could be preparing a bankruptcy filing for the coming days or weeks.
DeRiso wrote, “Over the past several months we have been meeting with financial advisors hired by our international union to continually monitor the finances of Tops Markets. As reported earlier, the company has hired Evercore, a global, independent, private investment firm to help them restructure its enormous debt.
“Since mid-January, UFCW Local One has been consulted by our legal team consisting of health care, pension and 401K attorneys and an attorney that specializes in restricting and bankruptcy filings. We have additional meetings set up this week (Feb. 19-23) to discuss more strategies to hit this situation head on.”
DeRiso said Tops Markets currently is paying all contractual obligations, including health, pension and 401(k) contributions, and the contract for Local One’s 12,000 Tops members is in full effect.
