Tops Friendly Markets can move ahead with its store closing procedures after a federal bankruptcy judge approved the company’s paperwork last week.
The embattled grocery chain, which filed for Chapter 11 bankruptcy in February, asked for judicial approval in April to close some underperforming stores, or “any stores that they determine, in their business judgment, should be closed in order to preserve liquidity and maximize the value of their respective estates."
While the majority of stores are "sustainable profit centers," others have "consistently under-performed,” the company said in court paperwork. Reasons given for low performance included locations saturated with other grocery stores, inappropriate store sizes or locations with above-market rent.
No decisions have been made about which stores are closing, said Tops spokesperson Kathleen Romanowski on Monday.
We sat down with Buffalo bankruptcy attorney John Mueller to get his take:
The judge’s sign-off allows the company to close stores and conduct store closing sales with notice to the U.S. Trustee for the Southern District of New York — which handles administration of federal bankruptcy cases for this region — and other stakeholders, including landlords and local utility companies.
The company was also authorized last week to hire a bankruptcy consultant.
Tops, headquartered outside of Buffalo, operates 169 full-service stores across the nation, with five additional locations operated by franchisees under the Tops Friendly Markets banner.