SYRACUSE, N.Y. — The union that represents Penn Traffic workers said it opposes the proposed acquisition of 22 stores by Price Chopper Supermarkets, based in Schenectady, N.Y.
In a formal objection filed with the bankruptcy court in Wilmington, Del., last week, United Food and Commercial Workers Local 1, along with sister Locals 23 and 1776, said the sale to Price Chopper, a non-union operator, would be prohibited by Penn Traffic's bargaining agreement with the union because Price Chopper would not assume the labor contract that is currently in place.
As previously reported, Price Chopper has bid $54 million for 22 of Penn Traffic's P&C locations.
“The union's objection is not surprising,” Neil Golub, chief executive officer, Price Chopper, told SN last week. He declined to comment further on the matter.
A report in the Syracuse Post-Standard, meanwhile, said Williamsville, N.Y.-based Tops, which does employ union workers, was preparing an offer late last week for a significant number of locations. Previously, that offer had been reported to be about $90 million.
“Tops is interested in acquiring Penn Traffic's assets,” a Tops spokeswoman confirmed to SN. “At this time we cannot comment on or speculate about any outcome.”
In their filing with bankruptcy court, the UFCW locals stated that “any going concern sale by Penn Traffic is conditioned on the purchaser's agreement to be bound by the terms of the collective bargaining agreement” with UFCW Local 1. The three locals together employ about 4,500 Penn Traffic workers.
In addition to the objection filed by the union, objections to the Price Chopper bid were also filed by the union pension fund and the union health care fund, among others.
Although bids were originally due last month — Penn Traffic reportedly is seeking a rapid sale — the deadline was extended until Jan. 21 after intervention on the part of Sen. Charles Schumer, D-N.Y.
At a Dec. 30 worker rally co-hosted by UFCW Local 1, Schumer said allowing extra time for additional bidding will result in more of Penn Traffic's locations being sold.
“Penn Traffic has received numerous bids, and the odds are pretty good that the vast majority of stores will remain open,” he said at the rally, a video of which was posted on YouTube.
As of last Thursday, the only bids that had been filed with the court were Price Chopper's $54 million offer for 22 stores and a stalking-horse liquidation offer of at least $36.5 million. C&S Wholesale Grocers, Penn Traffic's Keene, N.H.-based supplier, has also been reported to have an interest, although it had not filed a bid as of last Thursday.
The bankruptcy court in Wilmington, Del., where Penn Traffic is incorporated, is scheduled to announce the winning bids on Jan. 30.
Penn Traffic filed Chapter 11 bankruptcy in November and said it plans to seek buyers for all 79 of its locations, 53 of which are in New York. It operates under the P&C, BiLo and Quality Market banners.
The bankruptcy filing was Penn Traffic's third in 10 years. It listed assets of $150.4 million and debts of $136.9 million. In 1998, shortly before its first filing, the company was generating annual revenues of $2.8 billion, operating 248 stores and operating a wholesale distribution business supplying other independents in the region. In its most recent fiscal year, which ended in January, revenues had plummeted to $872.3 million — before the sale of its wholesale distribution operations to C&S.