Marsh expected in bankruptcy court Friday; still looking for a buyer

Marsh due in bankruptcy court Friday
Marsh files for Chapter 11 Bankruptcy; still looking fo
Marsh files for bankruptcy
Marsh files for bankruptcy

INDIANAPOLIS (WTHR) - It came as little surprise Thursday morning, when Marsh Supermarkets filed for Chapter 11 bankruptcy protection.

It's a move intended to keep its remaining 44 stores open and its 2,800 employees on the payroll at least until July 1 as it seeks a buyer. The company has said employees pay and benefits will remain the same and it will continue to keep store shelves stocked with product. Its goals are to operate as usual.

"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," Chief Executive Officer Tom O'Boyle said in a press release. "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."

By filing Chapter 11, Marsh gets a reprieve from paying suppliers and others owed money. It hopes to use its cash on hand to pay for day-to-day operations moving forward. Several landlords have sued the company, claiming it has failed to pay rents.

The company is expected in court in Delaware Friday where a judge will consider the filing. This judge will decide whether Marsh can keep accepting gift cards and ask utility companies to keep the lights on.

A representative for the company says they still hope someone will want to take over the rest of the chain.

Larry Belcher, dean of the School of Business at the University of Indianapolis, said the filing buys Marsh some time.

"For now, this indicates the company is trying to gain some financial footing, get things stabilized and be able to meet their obligations," Belcher said.

Marsh has retained New York City-based investment banking firm Peter J. Solomon Co. to market the company's assets. The company estimated its liabilities at $100 million to $500 million and assets at $50 million to $100 million.

"That would be the best outcome for another firm to come in and buy Marsh out, to continue operations, make upgrades and do the the things they need to keep it going," Belcher said.

"It's more of a relief now that we know what's going on," said a Marsh worker.

But that worker and several other Marsh employees were still at the Kroger job fair on the north side Thursday, skeptical that Marsh would survive.

Marsh was acquired by Florida-based Sun Capital Partners in 2006 when it had 120 grocery stores.

The spokesperson told WTHR that Indianapolis Mayor Joe Hogsett's office called the company this morning and pledged to do all they can to help.

(The Associated Press contributed to this story.)

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