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Tops Markets elects to file for bankruptcy

RBR Staff Writer Published 22 February 2018

New York-based retailer chain Tops Markets has elected to file for reorganization under Chapter 11 to implement financial restructuring.

The company is pursuing a financial restructuring to reduce debt and strengthen competitive position.

To implement the financial restructuring, the company elected to file for reorganization under Chapter 11 of the Bankruptcy Code in the US Bankruptcy Court for the Southern District of New York.

Tops is working with several holders of over 65% of its Senior Secured Notes due 2022 and is continuing constructive discussions.

The company stated that it has sufficient liquidity to support its operations. It claims to have received commitment for $125m debtor-in-possession (DIP) term loan and a $140m DIP asset based revolving loan from Bank of America.

These two loans are expected to support the company’s operations during the court-supervised restructuring process.

Tops CEO Frank Curci said: “Tops has built strong market share and our stores continue to distinguish themselves by offering quality products at affordable prices with superior customer service. 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.”

The Buffalo News stated that the company has been struggling with interest payments, which were too much to bear, but it had a solid business. On top of that, falling prices of retail food prices were also cutting down on the company’s revenues.

By moving with Chapter 11 filing, the company is said to have escaped the chance of paying interests worth $80m a year, which were caused by $720m in debt which has accumulated since 2007, The Buffalo News stated.

The company also stated it will review some of its weakest performing stores and a small number of stores could be on the brink of closure.

Image: A Tops Market in Boston, New York. Photo: Courtesy of Buffaboy/Wikipedia.org.