Great Atlantic & Pacific Tea Co. and 53 affiliates[1] (the “Debtors” or “A&P”) filed for relief under Chapter 11 of the Bankruptcy Code on December 12, 2010 (Bankruptcy Court for the Southern District of New York, White Plains Division, Case No. 10-24549). The case has been assigned to the Honorable Robert D. Drain. This note briefly discusses the trade debt picture, identifies the first day motions directly affecting unsecured creditors, and provides the list of the Debtors’ 40 largest unsecured creditors.

Overview of the Debtors’ Trade Debt; Requested Authority to Make Critical Vendor Payments

An overview of the Debtors’ trade debt picture is provided in the declaration of Frederic F. Brace, Chief Administrative Officer and Chief Restructuring Officer of A&P in support of A&P’s critical vendor motion (the “Brace Critical Vendor Declaration”).  The trade debt numbers are summarized as:  7,600 open accounts (covering more than 5,000 separate vendors) and approximately $212 million in trade payables.”

Out of the total of more than 5,000 vendors, the Debtors have identified “a highly select group of vendors holding approximately $62 million in prepetition claims” as potentially critical vendors who the Debtors believe are “absolutely essential to operations.”   (The Debtors are also seeking approval of procedures for consideration of requests for “Critical Vendor treatment” from those vendors not on the initial list).  The Debtors also note that many of the already identified critical vendors may be entitled to administrative priority under section 503(b)(9).

The Brace Critical Vendor Declaration emphasizes that vendors who have long term contracts with the Debtors will not be considered for payment as “critical vendors.”  For example, the Debtors state that:

To be clear, vendors with long term contracts are not part of the Debtors’ proposed program. Instead, the Debtors intend to enforce their rights in court if such vendors use these chapter 11 filings or the Debtors’ financial condition as an excuse to suspend shipments, modify payment terms, or otherwise impair the Debtors’ rights.

One especially large vendor is identified for this “non critical vendor” treatment due to the existence of a long term contract.

The Debtors receive approximately 70 percent of their goods from C&S Wholesale Grocers, Inc. (“C&S”) pursuant to a long term contract. As a result, the Debtors do not seek authority to pay any prepetition amounts that may be owing to C&S by the program set forth in the Critical Trade Motion.

Other First Day Motions Requesting Authority or Procedures for Payment of Pre-Petition Claims

In addition to A&P’s critical vendor motion, the Debtors have filed the following motions for authority to pay and procedures for payment of prepetition claims:

1.   Debtors’ Motion for Entry of Interim and Final Orders (A) Authorizing Debtors to Pay Prepetition Claims of Warehousemen and Miscellaneous Lien Claimants, (B) Authorizing the Debtors to Grant Administrative Expense Priority To All Undisputed Obligations For Merchandise Ordered Prepetition And Delivered Postpetition and Satisfy Such Obligations in the Ordinary Course of Business and (C) Approving the PACA Procedures and Authorizing the Debtors to Pay Allowed PACA Claims

2.  Debtors’ Motion for Entry of Interim and Final Orders Authorizing, but not Directing, Debtors to (A) Pay Certain Prepetition Wages and Reimbursable Employee Expenses, (B) Pay and Honor Employee Medical and Other Benefits and (C) Continue Employee Benefits Programs

If the first of these motions is granted, the Debtors estimate the payment of approximately $240,000 in warehousing charges, $3,400,000 for miscellaneous lien claims,  and $3,272,000 in payment of PACA claims.

An Immediate Need to Reject Certain Leases

In a possible indication of things to come, A&P has filed a “First Omnibus Motion” to requesting authority to reject 73 commercial real property leases.  A&P describes these first leases for rejection as “dark store” leases  — i.e. leases for facilities where A&P has already ceased ongoing operations and has been unable to sublease, assign or terminate the lease.

A&P’s List of 40 Largest Unsecured Creditors

A&P has requested authority to file a consolidated list of the40 largest unsecured creditors in lieu of a separate list for each of the Debtors.  The consolidated list is set forth below.  A&P’s  list did not include a column to identify claims that were “Contingent, unliquidated, disputed, or subject to setoff.”

Creditor Nature of claim Amount of Claim
Holders of 6 3/4% Unsecured Convertible Senior Notes Due 2012 Bond Debt $229,000,000.00
Holders of 9 3/8% Unsecured Quarterly Interest Notes Due 2039 Bond Debt $200,000,000.00
Holders of 5 1/8% Unsecured Convertible Senior Notes Due 2011 Bond Debt $165,000,000.00
McKesson Drug Co Trade Debt $15,119,582.97
Holders of 9 1/8% Unsecured Senior Notes Due 2011 Bond Debt $12,840,000.00
Haddon House Food Products Trade Debt $10,611,632.18
Coca-Cola Enterprises Trade Debt $7,099,716.88
Frito-Lay Inc Trade Debt $4,528,126.38
Nabisco Biscuit Company Trade Debt $3,982,278.00
Pepsi-Cola-Hasbrouck Heights Trade Debt $3,172,078.50
Nestle DSD Company Ice Cream Trade Debt $2,158,873.50
Entenmann’s Bakery Trade Debt $2,154,250.58
Pepsi-Cola Bottling Company of New York, Inc. Trade Debt $1,728,999.81
Pepperidge Farm Inc Bread Trade Debt $1,696,820.59
Keebler Biscuit Co Trade Debt $1,617,637.69
Dora’s Naturals Inc Trade Debt $1,513,969.51
18718 Borman Avenue Lease Rent $1,456,000.00
Ashley Livonia A&P, LLC Lease Rent $1,391,936.00
Arnold Bakers Inc Trade Debt $1,388,848.95
S B Thomas Inc Trade Debt $1,304,352.95
Amalgamated Meat Cutters Union Debt $1,262,649.00
Stroehmann Bakeries Inc Trade Debt $1,238,504.27
Meadowbrook – Suffolk Trade Debt $1,158,432.84
Interstate Brands – Hostess Trade Debt $1,118,325.16
Advantage IQ Inc Utility Debt $1,109,220.91
Riveroak-Cofmance-Carteret, LLC Lease Rent $1,085,841.00
Garelick Farms Inc Trade Debt $1,055,286.18
Wise Foods Trade Debt $912,221.21
Grocery Haulers Inc Trade Debt $893,848.00
Farmland Dairies Trade Debt $877,892.67
Canada Dry Bottling of NY Trade Debt $860,523.71
OTR Associates Lease Rent $847,193.00
Lehigh Valley Dairies Inc Trade Debt $806,484.44
G/W Jefferson-St. Jean LLC Lease Rent $789,212.00
Bunzl Distribution Trade Debt $774,073.52
Snapple Distributors Inc Trade Debt $736,266.05
ISE America Trade Debt $719,575.88
FJ Livonia Portfolio, L.P. Lease Rent $673,049.00
Lami Products Inc Trade Debt $673,048.88
Martin’s Famous Pastry Trade Debt $670,705.84

The list does not include: (1) persons who come within the definition of “insider”); or (2) secured creditors, unless the value of the collateral is such that the unsecured deficiency places the creditor among the holders of the largest unsecured claims.

Bankruptcy Rule 1007(d) provides that a debtor shall file “a list containing the name, address and claim of the creditors that hold the 20 largest unsecured claims, excluding insiders.” Fed. R. Bankr. P. 1007(d). In the case of a multi-debtor filing, it is likely that many creditors are shared among certain of the debtors. This is especially the case where the debtors operate as a single business enterprise. Under these circumstances and provided that there is a request for joint administration, it is common for multiple, related debtors to request authority to file a single, consolidated list of their collective largest general unsecured creditors. These requests usually are granted by the bankruptcy court.

The Top Unsecured Creditor List is never to be considered a waiver of any defense to or “allowability” of a listed claim or an admission of the amount of any listed claim. It is common for the amount of the claims to shift and sometimes a claim that is initially is undisputed is later disputed. Creditors should always consult the official claims register.


[FN1] The Debtors are: The Great Atlantic & Pacific Tea Company, Inc.; 2008 Broadway, Inc.; AAL Realty Corporation; Adbrett Corporation; Amsterdam Trucking Corporation; APW Supermarket Corporation; APW Supermarkets, Inc.; Bergen Street Pathmark, Inc.; Best Cellars DC Inc.; Best Cellars Inc.; Best Cellars Licensing Corp.; Best Cellars Massachusetts, Inc.; Best Cellars VA Inc.; Bev, Ltd.; Borman’s Inc.; Bridge Stuart, Inc.; Clay-Park Realty Co., Inc.; Compass Foods, Inc.; East Brunswick Stuart, LLC; Farmer Jack’s of Ohio, Inc.; Food Basics, Inc.(1210); Gramatan Foodtown Corp.; Grape Finds At DuPont, Inc.; Grape Finds Licensing Corp.; Greenlawn Land Development Corp.; Hopelawn Property I, Inc.; Kohl’s Food Stores, Inc.; Kwik Save Inc.; Lancaster Pike Stuart, LLC; LBRO Realty, Inc.; Lo-Lo Discount Stores, Inc.; Mac Dade Boulevard Stuart, LLC; McLean Avenue Plaza Corp.; Milik Service Company, LLC; Montvale Holdings, Inc.; North Jersey Properties, Inc. VI; Onpoint, Inc.; Pathmark Stores, Inc.; Plainbridge, LLC; SEG Stores, Inc.; Shopwell, Inc.; Shopwell, Inc.; Spring Lane Produce Corp.; Super Fresh/Sav-A-Center, Inc.; Super Fresh Food Markets, Inc.; Super Market Service Corp.; Super Plus Food Warehouse, Inc.; Supermarkets Oil Company, Inc.; The Food Emporium, Inc.; The Old Wine Emporium of Westport, Inc.; The South Dakota Great Atlantic & Pacific Tea Company, Inc; Tradewell Foods of Conn., Inc.; Upper Darby Stuart, LLC; and Waldbaum, Inc.