Attached files
| file | filename |
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| EX-2.1 - PENN TRAFFIC CO | v170957_ex2-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
______________________
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
____________________
Date
of report (Date of earliest event reported): January 7, 2010
THE
PENN TRAFFIC COMPANY
(Exact
Name of Registrant as Specified in its Charter)
|
Delaware
(State
or Other Jurisdiction
of
Incorporation)
|
0-8858
(Commission
File Number)
|
25-0716800
(IRS
Employer
Identification
No.)
|
1200
State Fair Boulevard
Syracuse,
New York 13221-4737
(Address
of Principal Executive Offices) (Zip Code)
(315)
453-7284
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2 below):
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01. Entry into a
Material Definitive Agreement.
As
previously disclosed, on November 18, 2009, The Penn Traffic Company, and each
of its direct and indirect subsidiaries, including Penny Curtiss Baking Company,
Inc. (“PCBC”)
and Big M Supermarkets, Inc. (together with the Company and PCBC, the “Debtors”) filed
voluntary petitions (the “Chapter 11
Petitions”) for relief under Chapter 11 of the United States Bankruptcy
Code (the “Bankruptcy
Code”) in the United States Bankruptcy Court for the District of Delaware
(the “Bankruptcy
Court”). The Debtors are continuing to manage their properties
and operate their businesses as “debtors-in-possession” under the jurisdiction
of the Bankruptcy Court and no trustee or examiner has been appointed in the
Company’s case.
Asset Purchase Agreement
with Tops Markets, LLC
On January 7, 2010, the Company entered
into an asset purchase agreement (the “Asset Purchase
Agreement”) with Tops Markets, LLC (“Tops”) pursuant to
which the Company has agreed to sell Tops substantially all the assets of the
Company (the “Company’s Business”)
in exchange for $85.0 million (the “Purchase Price”) and
the assumption of certain liabilities associated with these
operations. The Asset Purchase Agreement is subject to approval by
the Bankruptcy Court. Tops entered into the agreement as a “stalking horse”
bidder, and the purchase of the Company’s Business is subject to the Company’s
receipt of higher or otherwise better offers pursuant to specified bidding
procedures and an auction process to be conducted under the supervision of the
Bankruptcy Court. Tops agreed to make a $12,500,000 deposit towards
the purchase price prior to January 13, 2009. $5.0 million of the
Purchase Price will be placed in escrow at closing and repaid to Tops in the
event of downward adjustments in the purchase price to the extent: (1) the
Company’s inventory levels are less than $38.0 million at the closing, (2) the
assets to be acquired by Tops are damaged in an amount exceeding $1.0 million
prior to the closing, or (3) the value of the assets to be acquired by Tops is
reduced due to Tops being unable to re-brand and remodel any of the Company’s
supermarkets because lessor(s) of such facilities have failed to consent or
waive applicable restrictions. As additional consideration for the
sale, the Company also obtained: (a) an agreement with C&S Wholesale
Grocers, Inc. (“C&S”) to reduce claims asserted by C&S against the
Company’s Business by approximately $27.0 million, among other things (the
“C&S
Agreement”) and (b) agreements with the United Food and Commercial
Workers, Local One (the “UFCW”) and the UFCW
Local One Pension Fund (the “Plan”) to reduce
claims asserted by UFCW and the Plan against the Company’s Business by
approximately $72 million (the “UFCW
Agreements”).
The
closing of the sale of the Company’s Business under the Asset Purchase Agreement
is conditioned upon the Company and Tops entering into: (1) a transition
services agreement providing that the Company will provide services to Tops to
facilitate the transfer of the Company’s Business (the “Transition Services
Agreement”), (2) an Agency Agreement authorizing Tops to act as the
Company’s agent to sell the merchandise at and conduct going out of business
sales at certain of the Company’s stores (the “Agency Agreement”),
and (3) an Interim Operating Agreement authorizing Tops to act as the Company’s
agent to operate certain of the Company’s stores pending Tops’ decision to
assume or reject unexpired leases of the stores (the “Interim Operating
Agreement”).
Tops and
the Company have also made customary representations, warranties and covenants
in the Asset Purchase Agreement, including, among others, a covenant by the
Company to operate the Company’s Business in the ordinary course during the
performance of the Asset Purchase Agreement. Tops may terminate the
Asset Purchase Agreement if the Company enters into a definitive agreement
regarding sale of all or a portion of the Company’s Business in an alternative
transaction, and in such case would be entitled to the return of its deposit, as
well as a break-up fee of $2,550,000 upon the closing of such alternative
transaction, subject to the Bankruptcy Court’s allowance of such fee as an
administrative expense. The Asset Purchase Agreement may also be
terminated by either the Company or Tops upon the occurrence of other specified
events.
On
January 8, 2010, the Bankruptcy Court approved the Tops break-up fee described
above, as well as bidding procedures for the Company’s solicitation of higher or
better offers. The approved bidding procedures specify that the
deadline for submission of bids competing with the Asset Purchase Agreement is
12:00 p.m. (prevailing Eastern Time) on January 19, 2010. If at least
one qualified bid is submitted by this deadline, an auction will be held with
respect to the Company’s Business no later than 4:00 p.m. (prevailing Eastern
Time) on January 21, 2010. A hearing to approve the winning bid will
be held on or before January 25, 2010.
The
foregoing description of the terms of the Asset Purchase Agreement is qualified
in its entirety by reference to the Asset Purchase Agreement, which is filed
herewith as Exhibit 2.1.
The
Asset Purchase Agreement has been included to provide securityholders with
information regarding its terms. This was not intended to provide any
other factual information about the Debtors. The representations,
warranties and covenants contained in the Asset Purchase Agreement were made
only for purposes of such agreement and as of specific dates, were solely for
the benefit of the parties to such agreement, and may be subject to limitations
agreed upon by the contracting parties, including being qualified by
confidential disclosures exchanged between the parties in connection with the
execution of such agreement. The representations and warranties in
the Asset Purchase Agreement may have been made for the purposes of allocating
contractual risk between the parties to such agreement instead of establishing
these matters as facts, and may be subject to standards of materiality
applicable to the contracting parties that differ from those applicable to
investors.
Prior Agreement with Price
Chopper
As previously disclosed, on December
15, 2009, the Company, as successor to P & C Food Markets, Inc. entered into
an asset purchase agreement with Price Chopper Operating Co., Inc. (“Price Chopper”)
pursuant to which the Company had agreed to sell Price Chopper substantially all
the assets used in the operation of 22 of the Company’s retail stores, in
exchange for $54.0 million and the assumption of certain liabilities associated
with these operations (the “Prior Asset Purchase
Agreement”). Due to the Company’s entry into the Asset
Purchase Agreement described above, the Bankruptcy Court authorized the Company
to withdraw its motion for approval of the Prior Asset Purchase Agreement on
January 8, 2010.
Prior Comprehensive Agency
Agreement with Hilco
On January 3, 2010, the Debtors entered
into a Comprehensive Agency Agreement (the “Agency Agreement”)
with a joint venture comprised of Hilco Merchant Resources, LLC and Hilco Real
Estate Holdings, LLC (such joint venture, the “Agent”) pursuant to
which the Debtors appointed the Agent and the Agent agreed to serve as the
Debtors’ exclusive agent for the purpose of the sale or other disposition of all
the Debtors’ assets other than the PC Stores, the Debtors’ intellectual
property, and information technology located in the Debtors’ distribution
centers. Due to the Company’s entry into the Asset Purchase Agreement
described above, the Bankruptcy Court authorized the Company to withdraw its
motion for approval of the Agency Agreement on January 8, 2010.
Item
9.01 Financial Statements and
Exhibits.
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Exhibit
No.
|
Exhibit
|
|
2.1
|
Asset
Purchase Agreement
|
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
THE
PENN TRAFFIC COMPANY
(Registrant)
|
|||
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By:
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/s/
Daniel J. Mahoney
|
||
|
Name:
|
Daniel
J. Mahoney
|
||
|
Title:
|
SVP,
General Counsel
|
||
Date:
January 12, 2010