Too much debt and soft sales pushed the owner of Tops Markets into Chapter 11 bankruptcy.
Here's how the supermarket chain came to be saddled with $724 million in debt. Nearly half of the debt was used to pay nearly $350 million in dividends to its owner at the time, Morgan Stanley Private Equity.
2007: Morgan Stanley Private Equity buys Tops from Ahold for about $300 million. To finance the deal, Morgan Stanley takes out $200 million in loans.
Total debt: $200 million
2009: Morgan Stanley sells $275 million in debt. It uses that money to pay down some of its loans and pays itself $105 million in dividends.
Total debt: $275 million
2010: Tops issues $75 million in new debt to help pay for stores it acquired from Penn Traffic Corp.
Total debt: $350 million
2012: Tops issues $460 million in new debt to repay the notes it issued in 2009 and 2010, plus pay a $100 million dividend to Morgan Stanley.
Total debt: $460 million.
2013: Tops, seven months before the management buyout, issues $150 million in new debt and uses nearly all of it to pay $142 million in dividends to Morgan Stanley. In addition, Tops borrowed $14 million on its credit line in October 2009. By the time the supermarket's management bought the company in December 2013, borrowings under that credit line had grown to $55 million.
Total debt: $665 million.
2017: Total debt was $724 million.
Story topics: Tops bankruptcy