After liquidation speculation in local media, Fairway Market has filed for Chapter 11 bankruptcy protection as the company seeks to sell its 14 gourmet-oriented supermarkets in metro New York.
The company said it has entered into a stalking horse asset purchase agreement with Village Super Market to sell up to five New York City Fairway stores and the associated distribution center for $70 million. Part of the Wakefern cooperative, Village operates a chain of supermarkets and specialty markets in the Northeast under the ShopRite and Gourmet Garage banners.
Fairway noted that it would execute a court supervised sale process to continue negotiating for the sale of its remaining store locations. An ad hoc group of the company’s senior lenders will provide Fairway with up to $25 million in debtor in possession financing as it navigates Chapter 11. Fairway will conduct business, it asserted, and continue to serve customers at its stores across the tri-state area during the court proceedings.
Abel Porter, Fairway CEO, said, “After careful consideration of all alternatives, we have concluded that a court-supervised sale process is the best way to meet our objectives of preserving as many jobs as possible, maximizing value for our stakeholders, and positioning Fairway for long term success under new ownership.”