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Tops Friendly Markets reportedly seeks advice on bankruptcy
Tops Friendly Markets reportedly seeks advice on bankruptcy
Tops Friendly Markets is contemplating bankruptcy reorganization in an attempt to get out from under debt incurred from a series of profit skimming steps over the last decade, according to published reports.
The union representing employees at approximately 170 stores, United Food and Commercial Workers Local One, released a statement saying it has been in talks with attorneys counseling them about potential impacts on workers of bankruptcy since January.
“As reported earlier, the company has hired Evercore (a global independent private investment firm) to help them restructure their enormous debt,” said the statement from Frank DeRiso, union president.
The company has changed hands at least twice in the last decade and doubled in size. According to Bloomberg, Morgan Stanley tried to recoup costs of its 2007 takeover by rapidly expanding the chain, founded in Williamsville, Erie County, nearly a century ago. The Great Recession and competition from new players in the grocery industry made it difficult to reap profits from expanding from 71 to 150 stores in six years. Morgan Stanley rewarded shareholders with dividends anyway, borrowing even more money, Bloomberg reported.
Management of the chain bought Tops back from Morgan Stanley and its investors in 2013, but still faced major debt. Since then some stores have closed and others were streamlined, but the chain is still wrangling with debt.
A company spokesperson could not be reached for comment. Tops stores are located in New York, Pennsylvania and Vermont.
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