Marsh Supermarkets has filed for Chapter 11 in a last ditch effort to reorganize its assets while looking for a buyer to take over some or all of the chain’s remaining locations.
If the company doesn’t find a buyer within the next 60 days, all of the remaining locations will close, said a Marsh spokesperson. Marsh operates 60 total stores; 54 in Indiana and six in Ohio. Out of the 60 locations, 16 stores are scheduled to close by the end of May.
The remaining 44 stores will operate throughout the reorganization. The filing triggers an automatic stay, which precludes the company from paying back vendors and store landlords.
“While today’s decision was extremely difficult, we believe this action is necessary to preserve the value of the business as we seek a sale,” said CEO Tom O’Boyle said in a prepared statement. “After reviewing every alternative, we concluded that Chapter 11 clearly provides the most effective and efficient means to ensure the best recovery for the company’s stakeholders.”
Marsh Supermarkets’ liabilities are estimated in the range of $100 million to $500 million and assets at $50 million to $100 million, according to reports. The largest unsecured creditors are Central States Southeast Areas Pension Fund and a Marsh Supermarkets Prudential Retirement contract, owed at $61.6 million and $21.7 million, respectively. The third largest creditor is Marsh’s primary grocery supplier, Supervalu, which is owed $8.1 million, according to reports.
The grocer asked the US Bankruptcy Court’s permission to use its available cash to pay for operations, pay its employees and provide benefits and to continue closing stores at specific locations. By the end of the month, 16 more stores are slated for closure, eliminating 1,454 full and part time positions.
Marsh Supermarkets points to a competitive market and dramatic price cutting for the company’s thin profit margins. In response, the company closed 21 unprofitable stores and sold its in-store pharmacy to CVS Pharmacy earlier this year.
Founded in 1931, Marsh Supermarkets was acquired in 2006 by Sun Capital Partners when it had 120 locations. Since then, Sun Capital has sold control but retains a financial interest in the business.