Fairway files for bankruptcy

The Fairway supermarket chain has filed for Chapter 11 bankruptcy protection, but the New York-based grocer already has reorganization plan.

Under Chapter 11, Fairway plans to shed debt and free up funds to invest on upgrades including technology, according to The Wall Street Journal.

The grocery began in the 1930s as a fruit and vegetable stand on Manhattan's Upper West Side and took the Fairway name in 1954. In 2007, the founding family sold the company to Sterling Investment Partners, but expansion across the tri-state area was too much for the specialty grocer, according to Forbes.

Fairway became a publicly traded company in 2013 and operates 15 stores in New York City, New Jersey, Long Island and Connecticut.

The chapter 11 plan calls for Fairway's senior lenders to swap debt for equity and new debt. Trade creditors, employee contracts and landlords will be unaffected, according to papers filed in the U.S. Bankruptcy Court in New York.

Fairway failed to attract a buyer and in February, the company began exploring options and now has a pre-negotiated turnaround plan. Stakeholders have already begun voting on the plan.

For more:
- see this Wall Street Journal story
- see this Forbes article

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