Penn Traffic withdraws old sale deals in light of $85 million offer

By Caroline Salls

Pittsburgh, Jan. 12 - The Penn Traffic Co. has received bankruptcy court approval to withdraw its previous motions to sell substantially all of the assets related to 22 stores and to enter into an agency agreement to sell other assets, intellectual property and information technology, because it entered into an $85 million agreement to sell substantially all of its assets to Tops Markets, LLC.

According to an 8-K filed with the Securities and Exchange Commission, Penn Traffic entered into an asset purchase agreement with Price Chopper Operating Co., Inc. to sell the 22 stores for $45 million, plus the assumption of liabilities.

In addition, the company entered into an agency agreement with a joint venture comprised of Hilco Merchant Resources, LLC and Hilco Real Estate Holdings, LLC to serve as the exclusive agent for the sale of the other assets, intellectual property and information technology.

The bid procedures related to the proposed Tops Market sale were approved on Friday.

An auction will be held on Jan. 21 if any competing bids are received, and the sale hearing is scheduled for Jan. 25.

Penn Traffic, a Syracuse, N.Y.-based company involved in retail and wholesale food distribution, filed for bankruptcy on Nov. 18 in the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 case number is 09-14078.

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