Penn Traffic, the parent company of Quality Markets, has filed for Chapter 11 bankruptcy protection for the second time in four years.
All 212 of Penn Traffic's stores, including its seven Quality Markets locations in Western New York, will operate as usual for now, said Marc Jampole, a company spokesman.
But the Syracuse-based company might reduce its number of stores or cut jobs as the restructuring unfolds. It said it will evaluate all of its stores and leases.
"We may close some stores or we may sell some stores, but we don't know yet," Jampole said. "But it's certainly too early to talk about or predict where or when."
The company said its decision to file was based partly on a decline in its liquidity, following weaker results in the past two quarters. It also cited tougher competition, a slow economy and a drop in consumer confidence as factors.
As of the end of its fiscal year on Feb. 1, the company reported assets of $742 million at book value and liabilities of $678 million.
Penn Traffic said it intends to reorganize and emerge from bankruptcy as quickly as possible, and has secured a commitment for $270 million in debtor-in-possession financing from Fleet Capital Corp. and a group of lenders that had loaned money to the company prior to the filing.
A bankruptcy court judge approved the company's request to immediately access $70 million of the financing.
Penn Traffic warned on May 20 that it was considering filing for bankruptcy. That prompted some vendors to halt their shipments to Penn Traffic, fearing they might not be paid right away.
The company's chief financial officer, Martin Fox, resigned last week for "personal reasons," the company said.
Nasdaq "delisted" Penn Traffic's stock on Friday after the company missed a deadline for submitting its annual report.
The company in 1999 went through a prenegotiated bankruptcy that lasted four months.
Penn Traffic entered the Western New York market in 1993 when it bought 15 Bells supermarkets.