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Tops Friendly Markets announced Monday that its bid to acquire a majority of Penn Traffic's assets, including its 79 supermarket locations, has been approved by the U.S. Bankruptcy Court.  Supermarkets include local P&C outlets, but the status of these stores is still uncertain.

"It is Tops' intention to run as many stores and retain as many jobs as possible," says company spokesperson Katie McKenna.  "Over the next month, Tops will be diligently evaluating all 79 locations including the stores' economic viability to determine which stores Tops will continue to operate, sell to other retailers, or close."

Penn Traffic filed for Chapter 11 bankruptcy protection from its creditors in mid-November for the third time in a decade.  It was up to Delaware Bankruptcy Judge Peter Walsh to rule on whether its assets would be sold off in pieces, including a bid from Price Chopper to purchase 22 P&C outlets for $54 million.  Most of the chain's 57,000 employees reportedly objected to that bid. 

On Monday Walsh approved Tops' January 8th offer to pay Penn Traffic $85 million in cash and eliminate about $100 million in unsecured claims against Penn Traffic by UFCW Local One Pension Fund and C&S Wholesale Grocers. 

"We are very pleased that the court has approved our comprehensive bid, said Frank Curci, Tops' president and CEO. "We look forward to the upcoming closing and the opportunity to bring the Tops Friendly Markets shopping experience to our new neighbors and customers."

Bank of America Merrill Lynch and Morgan Stanley are advising Tops on the transaction, and it was expected that the deal would close by the end of this week.  But that doesn't provide assurance to P&C employees that their jobs have been saved.  Tops officials have yet to decide which stores will remain open, and what name they will be operating under.

"As is usual in acquisitions of this type, the Federal Trade Commission (FTC) has started its review of these stores," McKenna says.  "Any comment made regarding the status of individual stores would be premature at this time.  Decisions regarding what name will be carried by stores in the future will be determined based on what makes the best business sense."

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