A&P committee sues to recover $26.77 million in transfers, payments

By Caroline Salls

Pittsburgh, April 17 – The Great Atlantic & Pacific Tea Co., Inc. (A&P)’s official committee of unsecured creditors filed a lawsuit Monday in the U.S. Bankruptcy Court for the Southern District of New York in an effort to recover $19.35 million in payments allegedly made to preference defendants and $7.42 million owed by promotion defendants.

According to the lawsuit, the preference defendants include Pepsico, Inc., Bottling Group, LLC, Frito-Lay North America, Inc., Pepsi-Cola Metropolitan Bottling Co., Inc., Pepsi-Cola Hasbrouck Heights, Pepsi-Cola Bottling Co. and Pepsi-Cola Bottling Pennsauk.

Meanwhile, the promotion defendants include PepsiCo; Pepsi USA; Bottling Group, Frito-Lay, Quaker Sales and Distribution, Inc., Pepsi Metro, Stacy’s Pita Chip Co., Inc., Pepsi Hasbrouck, Pepsi Bottling; Pepsi Bottling Group, NJ and Muller Quaker Dairy, LLC.

The committee said the debtors making the preferential transfers were insolvent at the time they were made.

“Apparently sensing the financial distress in which the debtors found themselves, however, and contrary to the policies underlying the Bankruptcy Code, the preference defendants pressed for quicker and quicker payment for goods,” the lawsuit said.

“The preference defendants’ tactics worked; they received quicker, indeed preferential, payments. By this adversary proceeding, the committee now seeks to recover those preferential payments on behalf of the GAPT bankruptcy estate.”

In addition, the committee said the promotions defendants have failed to pay the amounts they owe to the A&P estates.

A&P, a Montvale, N.J.-based operator of supermarkets, filed for bankruptcy on July 19, 2015. The Chapter 11 case number is 15-23007.

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