Struggling supermarket chain Marsh has filed for Chapter 11 bankruptcy protection.
“While today’s decision was extremely hard, we believe this action is necessary to preserve the value of the business as we seek a sale”, stated Chief Executive Officer Tom O’Boyle in the release.
WISH-TV and the Indianapolis Star reported Tuesday a Marsh spokesman had confirmed that the entire chain may close down if no buyer turns up.
Five parties expressed interest in purchasing some combination of stores, and some of these parties are still engaged in due diligence, according to the document.
The filing triggers an automatic stay, which precludes Marsh from paying amounts owed to vendors and store landlords. Company C.E.O., Tom O’Boyle, comments, “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”.
A spokesperson says Marsh has partnered with the investment firm Peter J. Solomon Company to seek a buyer or investor.
The Chapter 11 filing permits daily operations to continue without interruption.
Marsh, which filed in Wilmington, Del., federal court, has asked for permission to use its available cash to fund operations during this period.
Founded in Muncie in 1931, Marsh grew to include stores across much of in and in Ohio.
Marsh was founded in 1931 by Ermal Marsh and expanded throughout the state and into Ohio.
The statement says the competitive grocery market in IN and OH, where all the stores are located, forced the chain to close 21 stores this year and sell the pharmacy business to CVS.
In September 2006, MSH Supermarkets, Inc., an affiliate of Sun Capital, completed the acquisition of Marsh Supermarkets, Inc. for a total purchase price of approximately $325 million.
The crowded market amid the recent deflationary environment has led to price-cutting and other forms of promotional activity that have further squeezed profit margins.