A&P Files Bankruptcy-Exit Plan Based On Yucaipa Financing

Great Atlantic & Pacific Tea Co. (GAP), the bankrupt supermarket company known as A&P, proposed a plan to exit court protection based on financing from an investor group that includes Ron Burkle’s Yucaipa Cos.

A&P won court approval today of the $490 million financing commitment and filed its proposal to pay creditors and complete its restructuring with the U.S. Bankruptcy Court in White Plains, New York.

The capital provided by the investment agreement, which allows A&P to consider better offers as it works to complete its bankruptcy case, are necessary for A&P to be viable, Ray Schrock, a lawyer for the company said.

“Without this capital infusion there is no viable reorganization,” Schrock told U.S. Bankruptcy Judge Robert Drain at a court hearing. “It’s absolutely critical.”

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