A&P works through chapter 11.(NEWS)

MONTVALE, N.J.--A&P started the year 2011 with a whimper.

The regional supermarket operator, whose history dates back 150 years, filed for protection under Chapter 11 of the bankruptcy code after failing to improve on poor sales numbers and financial results.
The filing was made in an effort to carry out necessary financial and operational restructuring.
"We have taken this difficult but necessary step in order to enable A&P to fully implement our restructuring plan," said Sam Martin, president and chief executive officer. "While we have made substantial progress on the operational and merchandising efforts of our turnaround strategy, we concluded we couldn't achieve this without availing ourselves of Chapter 11."
While Christian Haub has retained the title of chairman, he was relieved of all executive capacity at the company. Frederic Brace, who became the company's chief administrative officer in August 2010, took on the additional title of chief restructuring officer when the filing was made.
The bankruptcy filing brought conjecture among analysts that along with this step might come the closing of up to 100 of A&P's 395 units. A&P had already begun to close stores before the filing, selling seven stores in Connecticut to Big Y Foods Inc.
Meanwhile, the United Food and Commercial Workers Union contacted the office of New York City Mayor Michael Bloomberg and council speaker Christine Quinn trying to stop the closure of as many of 58 stores in New York's five boroughs employing approximately 6,500 associates.
The bankruptcy filing was not unexpected. A few months after being named the company's chief executive officer in 2010, former Borders Group chief executive Ron Marshall told a meeting of analysts that upon joining the company and conducting an in-depth review, he had determined that the economy was not the only reason for A&P's anemic financial standing.
Year in Review 2011
"We face issues here that are systemic, deep and profound, that must and will be addressed before we can achieve the success that our shareholders and associates deserve," Marshall told the gathered analysts. Soon after, he left the company and was replaced by Martin.
The gloom at A&P lingered through most of 2011, not helped by the fact that the company did not enter bankruptcy with a prearranged plan for coming out of Chapter 11 protection.
But the company ended 2011 on a sudden and largely unexpected note of optimism when private investors committed $490 million in debt and equity financing for A&P--enabling the retailer to emerge from Chapter 11 as a private company early in 2012.
"This investment positions us for a bright future," said Martin.
The funding, from Yucaipa Cos., Mount Kellett Capital Management LP and Goldman Sachs Asset Management LP, is subject to bankruptcy court approval. This infusion of cash would now be the foundation of A&P's reorganization plan, Martin said.