The unsecured creditors in the Penn Traffic bankruptcy case are pleading with Judge Peter Walsh to extend for 30 days all of the deadlines for selling the P&C supermarkets and other company assets. The committee of vendors and other businesses with financial ties to Penn Traffic criticizes the current proposals to sell the company calling them a "fire sale" of a company that has annual revenues of $872 million.
The court filing from the creditors cites interest from several unnamed companies who would like to bid on the Penn Traffic stores if given more time to accurately assess their value. The unsecured creditors blame the secured lenders for forcing the expediting timeline saying the year end sale will be for the "exclusive benefit of the lenders minimizing any value left for the administrative and unsecured creditors of the estate."
In a sign of developing consensus on extending the timeline for selling the stores the court papers indicate Penn Traffic and the investment group looking to purchase the stores have both agreed to extend the sale deadline to January 28, 2010. However, the secured lenders who are represented by GE Capital have not agreed to the extension in out of court discussions.
The unsecured creditors committee includes companies like DeliBoy and American Greetings. It points to the challenging calendar of the holiday season as being an obstruction to maximizing the value of a sale of Penn Traffic for all parties. The papers express confidence that, with another 30 days, pieces of the company could be sold and could continue operations under new ownership instead of being forced to shutdown due to the immediate pressure to liquidate.
A key hearing on two agreements to sell Penn Traffic's assets is scheduled for Tuesday, December 15th at 3:00 pm. Penn Traffic filed for bankruptcy on November 18th. It owns 79 grocery stores and employes 5,700 people in New York, Pennslyvania, New Hampshire and Vermont.