Fairway Group Holdings, the parent company of Fairway Market, has announced the company has filed a Prepackaged Chapter 11 Plan of Reorganization in order to restructure its finances for long-term financial health while continuing its day-to-day operations “without interruption” for its customers and employees.
“We are open for business,” wrote CEO Jack Murphy in a May 2 letter assuring vendors the company will continue to pay for goods and services.
“This doesn”™t change a thing.”
In agreement with its lenders, the company will eliminate approximately $140 million in debt and is seeking approval for $55 million in debtor-in-possession credit facility in addition to a $30.6 million letter of credit facility to cover outstanding letters of credit.
The company currently operates 15 stores throughout New York, Connecticut and New Jersey with the 2010 Fairway Market in Stamford their largest location and only one in Fairfield County.
Sterling Investment Partners of Westport is the majority stakeholder of Fairway Group Holdings.
“We believe that implementing this prepackaged plan is the best opportunity for Fairway to restructure its balance sheet on an expedited basis, strengthen its operations, retain jobs and create long-term value, while continuing to provide customers with the best food experience in the greater New York area,” said Murphy in a May 2 Â public statement.
Under the restructuring plan, holders of general unsecured claims, including suppliers, employees, unions and all other trade creditors will receive payment in full and collective bargaining agreements with union entities will remain “in full force and effect.”
Additionally, all of the company’s outstanding shares of common stock will be cancelled with no distribution to holders.
