FOR IMMEDIATE RELEASE: December 30, 2009
AFTER SECURING MORE TIME TO SAVE PENN TRAFFIC JOBS: SCHUMER HOLDS RALLY WITH PENN TRAFFIC EMPLOYEES AND COMMUNITY MEMBERS; PLEDGES TO DO EVERYTHING POSSIBLE TO SECURE BIDDER THAT SAVES THE MOST JOBS
Last Week Schumer Secured A Commitment From GE Capital To Give Penn Traffic More Time to Lock Down Bidders that Will Keep the Most Stores Open - And Avoid Liquidation and Thousands of Lost Jobs
Schumer Today Held a Rally With Penn Traffic Workers In Syracuse - Pledged to Continue to Put Pressure On All Parties to Reach An Agreement That Preserves The Most Jobs And Stores; Many Stores Are in Rural Areas With Precious Few Food Shopping Options
Schumer: We Must Make Sure That The Bidder or Bidders Who Will Preserve The Most Jobs is Selected
Today U.S. Senator Charles E. Schumer held a rally with Penn Traffic employs in North Syracuse. Schumer joined employees, union members and community members a week after helping to secure more time for Penn Traffic to find bidders for more of their stores. Last week Schumer announced that GE Capital has agreed to pursue a schedule for bids that corresponds to Schumer’s request to keep Penn Traffic open and operating through the end of January. Schumer called GE Capital CEO Mr. Neal two weeks ago to request flexibility on credit terms to allow the extra time the company needs to sell as many stores as possible to bidders that would keep them operating as going concerns. The senator was concerned that the possibility of liquidation – and the immediate shuttering of store doors at scores of locations, and workers tossed out at Christmas time – loomed as an all-too-real possibility for upstate workers and consumers. Previously, the deadline to submit bids had been today. However, GE confirmed that the deadline to submit bids would be extended to January 20th or 21st with the goal of having a deal wrapped up by January 31st.
Today Schumer said that we have made some progress towards preserving most of the jobs and stores and that several promising bidders have come forward. He pledged to continue to work with all parties involved in the negotiations to select a bidder that would keep the most stores open and save the most jobs. He also pledged to help in any way possible any bidder that submitted comprehensive and complete bids.
“We have made some significant progress on the road to saving thousands of jobs and scores of grocery stores, many in underserved communities, but there is more left to be done,” said Schumer. “So today I am here to let everybody working with Penn Traffic know that we are watching, and that we will be keeping the pressure on to make sure that we save the most stores and the most jobs. I will fight for the workers and consumers upstate served by this company and help in any other way I can. GE Capital has been a good partner so far, and we must all continue working together for the benefit of the workers and the residents of New York State.”
Schumer contended that, compared to the going pending concern bids, liquidation would not have returned the highest amount of GE Capital’s loan. However, in many bankruptcy proceedings, the certainty of a liquidation transaction makes it attractive to creditors, as it limits the risk that a given deal will not close. GE Capital’s decision to puruse a path that parallels Schumer’s request will give Penn Traffic more time to execute a transaction that will potentially keep numerous stores open while saving thousands of jobs—a transaction that may not have been possible to execute without the additional time granted.
Penn Traffic operates stores in a number of rural locations where they are the only provider of groceries. Many communities would face commutes of an hour or more to find grocery stores without Penn Traffic. Penn Traffic has 76 stores, 53 of which are in NYS. They have 6,000 employees, roughly 4,000 are in NYS. The head of the lending group is GE Capital—they want to liquidate all of Penn Traffic’s stores on December 30th. All 6,000 employees will be fired under this scenario. In addition to the job loss, closing of supermarkets would devastate many communities that have only a single grocery store.
Schumer was joined by dozens of Penn Traffic employees, local shoppers, Frank DeRiso, President of UFCW Local 1 and Mark May, Representative of the Teamsters.
# # #