Fairway’s bankruptcy was following by a statement from the company pledging “no interruptions to customer service” as it restructures its finances. The parent company of Fairway Market filed for Chapter 11 bankruptcy protection, wiping out $140 million in debt it owed lenders and asking for court approval for $55 million in new funding to carry on its operations.
As part of its restructuring, the company is canceling outstanding shares, sending its penny stock into free fall Tuesday morning at 10 cents, down from a closing price of 21 cents Monday, AOL reports. Chairman is Charles Santoro, managing partner of Westport-based Sterling Investment Partners which holds a majority stake in the parent company.
Fairway has 15 grocery stores in the New York City market, including one in Connecticut that opened in November 2010, remaining as its largest today, totaling more than 85,000 square feet of space. Limited liability companies for the Connecticut store and its adjoining wine market are listed as debtors in the company’s bankruptcy filing in the U.S. Bankruptcy Court for the Southern District of New York.
In a “prepackaged” Fairway bankruptcy reorganization, the grocer stated its suppliers, employees and others with unsecured claims will receive payment in full, and that its union contracts remain in full force.
“We are open for business. This … doesn’t change anything,” wrote CEO Jack Murphy in a May 2 letter to vendors. “We will continue to deliver the best food experience in New York … We will pay for goods and services.”
A crowded two-story maze of pushy shoppers and sawdust-covered floors, Fairway’s original location in New York City is the closest thing the Upper West Side has to a village square. Local politicians glad-hand on the sidewalk outside. Neighborhood gossip is traded in the cheese corner. Local boldface names