Penn Traffic asks court to sell five distribution centers, then lease them back

By Jeff Pines

Washington, Dec. 23 - Penn Traffic Co. wants the court to approve the sale of five of its distribution centers for $37 million to Equity Industrial Partners Corp., which Penn Traffic will then lease for 15 years.

The agreement for the centers, which are in New York and Pennsylvania, comes with four consecutive five-year options to renew the lease. The base rent would be $4.13 million for the five centers.

The Syracuse, N.Y.-based grocery store manager filed its first amended disclosure statement with the U.S. Bankruptcy Court for the Southern District of New York Thursday.

The company estimates that holders of general unsecured claims will get a 32% to 44% recovery by getting all the reorganized company's common stock, which is unchanged from the original disclosure statement.

In addition, management said it is continuing to negotiate for an exit facility.

A hearing on the disclosure statement is scheduled for Jan. 27.

Penn Traffic filed for bankruptcy on May 30, 2003. Its Chapter 11 case number is 03-22945.

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