Great Atlantic & Pacific Tea Co. Is Approved For $800M Loan

NEW YORK — Great Atlantic & Pacific Tea Co., the bankrupt operator of almost 400 supermarkets under names including Waldbaum’s, Food Emporium and Pathmark, won approval of an $800 million loan over objections from bondholders who questioned the role of Yucaipa Cos. LLC.

U.S. Bankruptcy Judge Robert Drain in White Plains, New York today approved the loan after changes that set aside as much as $175,000 per month in legal fees for a trustee to certain notes. A group of bondholders owning the notes said the new loan would put them further in line to be repaid, in violation of an intercreditor agreement.

“I think that’s a fair resolution” Drain said. “It doesn’t resolve issues about the intercreditor agreement. Any issues under that are for another day.”

A&P resolved a creditor committee’s objections to the so- called debtor-in-possession, or DIP, financing Sunday night, A&P lawyer Paul Basta, told Drain today.

To read the rest of the story, please go to: The Star-Ledger (Newark, NJ).