MONTVALE, N.J. — A&P announced that it has reached an agreement with its labor unions that would help the retailer on its path out of bankruptcy.
According to The Star-Ledger, a New Jersey-based paper, the members of more than a dozen local chapters of the United Food and Commercial Workers International Union approved a deal that would cut wages about 3% by a vote of 7,200 to 1,827. Union members would still receive health care without a co-pay charge, the paper reported.
“This agreement with our labor unions marks a significant milestone in our turnaround efforts,” said Sam Martin, A&P’s president and CEO, in a press statement. “I want to thank our associates for their steadfast commitment to serving our customers throughout this process. As we position the Company to emerge from Chapter 11 early next year with a much stronger financial and operating foundation, we intend to continue making operational and service improvements to further enhance the value and in-store experience we provide to our customers.”
A&P agreed to a joint financing commitment from The Yucaipa Companies, Mount Kellett and investment funds managed by Goldman Sachs Asset Management. The U.S. Bankruptcy Court for the Southern District of New York granted approval of the investment agreement on Nov. 14, contingent upon successful resolution of the company’s negotiations with its labor unions.
A&P and its subsidiaries filed voluntary Chapter 11 petitions on Dec.12, 2010.