NORFOLK, Va. -- Farm Fresh here and its parent company, FF Holdings Corp., said last week they have filed petitions for a reorganization plan under a voluntary prepackaged Chapter 11 in U.S. Bankruptcy Court in Delaware -- a preliminary step to the acquisition of the chain by its wholesale supplier, Richfood Holdings, Richmond, Va.
y to confirm the plan following its approval by the bankruptcy court.
Farm Fresh and Richfood executed a definitive purchase agreement in November under which the wholesaler would pay $220 million in cash to acquire substantially all of the retailer's operating assets, including 44 of the 48 Farm Fresh stores. Farm Fresh said the purchase is expected to be effected under the chain's reorganization plan.
Farm Fresh said last week it had obtained first-day orders from the bankruptcy court that will enable it to continue to operate its business and to pay its vendors. The company also disclosed that its existing bank group has agreed to provide up to $40 million in debtor-in-possession financing.