The Great Atlantic & Pacific Tea Company, Inc. announced that the Locals of the United Food and Commercial Workers (UFCW) International Union have ratified modifications to their collective bargaining agreements with the Company. The new contracts are a key step toward completing the Company’s financial restructuring.
“This agreement with our labor unions marks a significant milestone in our turnaround efforts,” said Sam Martin, A&P’s President and CEO. “I want to thank our associates for their steadfast commitment to serving our customers throughout this process. As we position the Company to emerge from Chapter 11 early next year with a much stronger financial and operating foundation, we intend to continue making operational and service improvements to further enhance the value and in-store experience we provide to our customers.”
The agreement with A&P’s labor unions is consistent with and contemplated by the previously announced joint financing commitment from The Yucaipa Companies, Mount Kellett and investment funds managed by Goldman Sachs Asset Management. The U.S. Bankruptcy Court for the Southern District of New York granted approval of the investment agreement on November 14, contingent upon successful resolution of the Company’s negotiations with its labor unions.
A&P filed a joint Plan of Reorganization and Disclosure Statement with the Court on November 14. The Plan of Reorganization is subject to closing conditions, as well as approval from the Company’s creditors and the Court. Ratification of the Plan of Reorganization by the Company’s creditors will enable it to pay secured lenders in full in cash and fund cash recoveries for general unsecured creditors.
During the Company’s exit process, A&P intends to continue to operate its stores normally with the excellent products and service customers expect.
A&P and its subsidiaries filed voluntary Chapter 11 petitions on December 12, 2010.