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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 19, 1995
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THE PENN TRAFFIC COMPANY
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-9930 25-0716800
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
1200 State Fair Boulevard, Syracuse, New York 13221-4737
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (315) 453-7284
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. OTHER EVENTS
On January 19, 1995 The Penn Traffic Company issued the press release
attached hereto as Exhibit A with respect to the completion of its acquisition
from American Stores Company of 45 supermarkets. A Current Report on Form 8-K
relating to this acquisition was filed with the Securities and Exchange
Commission on October 12, 1994.
Item 7(c). EXHIBITS
10.25 Agreement Containing Consent Order dated January 9, 1995 by and
between The Penn Traffic Company and the Federal Trade Commission
entered into in the matter of The Penn Traffic Company.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE PENN TRAFFIC COMPANY
Date: January 26, 1995 By: /s/ Eugene R. Sunderhaft
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Name: Eugene R. Sunderhaft
Title: Vice President,
Chief Financial Officer
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Exhibit A
Immediate Release Contact: Gary D. Hirsch
Chairman of the Board
914-921-3000
Claude J. Incaudo
President & CEO
315-453-0382
PENN TRAFFIC ACQUIRES 45 SUPERMARKETS FROM AMERICAN STORES COMPANY
Syracuse, New York, January 19, 1995 -- The Penn Traffic Company announced
today that it has completed its previously announced acquisition from American
Stores Company of 45 supermarkets for approximately $75 million, plus inventory
(approximately $19 million).
Forty-one of the acquired stores are located in north central and
northeastern Pennsylvania, and four are located in south central New York state.
The stores, which had operated under the Acme trade name, will now operate under
the Insalaco, P&C, Riverside or Bi-Lo trade names.
"This is an important transaction for the continued growth of Penn
Traffic," said Gary D. Hirsch, Chairman of the Board of Syracuse, New York-based
Penn Traffic, one of the leading food retailers in the eastern United States.
"We are immediately taking steps to integrate the former Acme stores into
our existing operations, with a particular emphasis on improving the variety and
presentation of perishables in these stores. During the next two years, most of
these stores will undergo significant renovation, enlargement or replacement.
The improved facilities will allow us to serve our customers at the highest
possible level," said Mr. Hirsch.
The closing of the transaction, which was initially announced in September
1994, had been delayed pending review by the Federal Trade Commission. As a
result of this review, Penn Traffic has agreed to divest three stores in
Pennsylvania.
"While delay in the closing of this transaction has unfortunately impacted
our fourth quarter results, we are confident that these stores will be
meaningful contributors to the operating income of our Company in the coming
fiscal year," added Mr. Hirsch.
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Including the acquired Acme stores, The Penn Traffic Company operates 282
supermarkets in Pennsylvania, upstate New York, Ohio and northern West Virginia
under the "Big Bear," "Big Bear Plus," "Bi-Lo Foods," "Insalaco's," "Quality
Markets" and "Riverside Markets" trade names. Penn Traffic also operates
wholesale food distribution businesses serving 126 licensed franchises and 116
independent operators and a discount general merchandise business with 15
stores.
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Exhibit 10.25
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
_______________________________
)
In the Matter of )
)
THE PENN TRAFFIC COMPANY, ) File No. 951-0009
a corporation. )
)
)
AGREEMENT CONTAINING CONSENT ORDER
The Federal Trade Commission ("Commission") having initiated an
investigation of The Penn Traffic Company's ("Penn Traffic") proposed
acquisition of certain assets of American Stores Company (American), and it now
appearing that Penn Traffic hereinafter sometimes referred to as "proposed
respondent," is willing to enter into an agreement containing an order to divest
certain assets and to cease and desist from certain acts, and providing for
other relief,
IT IS HEREBY AGREED by and among proposed respondent, by its duly
authorized officers and attorneys, and counsel for the Commission that:
1. Proposed respondent The Penn Traffic Company is a corporation
organized, existing, and doing business under and by virtue of the laws of the
State of Delaware, with its office and principal place of business located at
1200 State Fair Boulevard, Syracuse, New York, 13221-4737.
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2. Proposed respondent admits all the jurisdictional facts set forth in
the draft of complaint here attached.
3. Proposed respondent waives:
a. any further procedural steps;
b. the requirement that the Commission's decision contain a
statement of findings of fact and conclusions of law;
c. all rights to seek judicial review or otherwise to challenge or
contest the validity of the order entered pursuant to this agreement;
and
d. any claim under the Equal Access to Justice Act.
4. This agreement shall not become part of the public record of the
proceeding unless and until it is accepted by the Commission. If this agreement
is accepted by the Commission it, together with the draft of complaint
contemplated thereby, will be placed on the public record for a period of sixty
(60) days and information in respect thereto publicly released. The Commission
thereafter may either withdraw its acceptance of this agreement and so notify
the proposed respondent, in which event it will take such action as it may
consider appropriate, or issue and serve its complaint (in such form as the
circumstances may require) and decision, in disposition of the proceeding.
5. This agreement is for settlement purposes only and does not constitute
an admission by proposed respondent that the law has
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been violated as alleged in the draft of the complaint here attached, or that
the facts as alleged in the draft complaint, other than jurisdictional facts,
are true.
6. This agreement contemplates that, if it is accepted by the Commission,
and if such acceptance is not subsequently withdrawn by the Commission pursuant
to the provisions of Section 2.34 of the Commission's Rules, the Commission may,
without further notice to the proposed respondent, (1) issue its complaint
corresponding in form and substance with the draft of complaint here attached
and its decision containing the following order to divest and to cease and
desist in disposition of the proceeding, and (2) make information public with
respect thereto. When so entered, the order shall have the same force and
effect and may be altered, modified, or set aside in the same time provided by
statute for other orders. The order shall become final upon service. Delivery
by the United States Postal Service of the complaint and decision containing the
agreed-to order to proposed respondent's address as stated in this Agreement
shall constitute service. Proposed respondent waives any right it may have to
any other manner of service. The complaint may be used in construing the terms
of the order, and no agreement, understanding, representation, or interpretation
not contained in the order or the Agreement may be used to vary or contradict
the terms of the order.
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7. Proposed respondent has read the proposed complaint and order
contemplated hereby. Proposed respondent understands that once the order has
been issued, it will be required to file verified written reports showing that
it has fully complied with the order. Proposed respondent further understands
that it may be liable for civil penalties in the amount provided by law for each
violation of the order after it becomes final.
ORDER
I.
IT IS ORDERED that, as used in this order, the following definitions shall
apply:
A. "Respondent" or "Penn Traffic" means The Penn Traffic Company, its
predecessors, subsidiaries, divisions, and groups and affiliates controlled by
The Penn Traffic Company, their successors and assigns, and their directors,
officers, employees, agents, and representatives.
B. "Assets to be divested" means the assets described in Paragraph II. A.
of this order.
C. "Commission" means the Federal Trade Commission.
D. "Supermarket" means a full-line retail grocery store that carries a
wide variety of food and grocery items in particular product categories,
including bread and dairy products; refrigerated and frozen food and beverage
products; fresh and
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prepared meats and poultry; produce, including fresh fruits and vegetables;
shelf-stable food and beverage products, including canned and other types of
packaged products; staple foodstuffs, which may include salt, sugar, flour,
sauces, spices, coffee, and tea; and other grocery products, including nonfood
items such as soaps, detergents, paper goods, other household products, and
health and beauty aids.
II.
IT IS FURTHER ORDERED that:
A. Respondent shall divest, absolutely and in good faith, within twelve
months from the date this order becomes final:
1. the "Acme" supermarket located at River and Park Streets, Borough
of Towanda, Pennsylvania;
2. the "Acme" supermarket located on Kennedy Boulevard in Pittston,
Pennsylvania; and
3. an "Acme" or a Penn Traffic supermarket located in the Township
of Mount Carmel, Pennsylvania.
The assets to be divested shall include the grocery business operated, and
all assets, leases, properties, business and goodwill, tangible and intangible,
utilized in the distribution or sale of groceries at the locations that are
divested.
B. Respondent shall divest the assets to be divested only to an acquirer
or acquirers that receive the prior approval of the
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Commission and only in a manner that receives the prior approval of the
Commission. The purpose of the divestiture is to ensure the continuation of the
assets to be divested as ongoing, viable enterprises engaged in the supermarket
business and to remedy the lessening of competition resulting from the
acquisition as alleged in the Commission's complaint.
C. Pending divestiture of such assets to be divested, respondent shall
take such actions as are necessary to maintain the viability and marketability
of such assets to be divested and to prevent the destruction, removal, wasting,
deterioration, or impairment of such assets to be divested except in the
ordinary course of business and except for ordinary wear and tear.
D. Respondent shall comply with all the terms of the Asset Maintenance
Agreement attached to this order and made a part hereof as Appendix I. The Asset
Maintenance Agreement shall continue in effect until such time as respondent has
divested all of the assets to be divested.
III.
IT IS FURTHER ORDERED that:
A. If respondent has not divested, absolutely and in good faith and with
the Commission's prior approval, such assets to be divested within twelve months
from the date this order becomes final, the Commission may appoint a trustee to
divest any of the
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remaining assets to be divested. In the event that the Commission or the
Attorney General brings an action pursuant to Section 5(l) of the Federal Trade
Commission Act, 15 U.S.C. Section 45(l), or any other statute enforced by the
Commission, respondent shall consent to the appointment of a trustee in such
action. Neither the appointment of a trustee nor a decision not to appoint a
trustee under this Paragraph shall preclude the Commission or the Attorney
General from seeking civil penalties or any other relief available to it,
including a court-appointed trustee, pursuant to Section 5(l) of the Federal
Trade Commission Act, or any other statute enforced by the Commission, for any
failure by the respondent to comply with this order.
B. If a trustee is appointed by the Commission or a court pursuant to
Paragraph III.A. of this order, respondent shall consent to the following terms
and conditions regarding the trustee's powers, duties, authority, and
responsibilities:
1. The Commission shall select the trustee, subject to the consent of
respondent, which consent shall not be unreasonably withheld. The
trustee shall be a person with experience and expertise in
acquisitions and divestitures. If respondent has not opposed, in
writing, including the reasons for opposing, the selection of any
proposed trustee within ten (10) days after written notice by the
staff of the Commission to respondent of
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the identity of any proposed trustee, respondent shall be deemed to
have consented to the selection of the proposed trustee.
2. Subject to the prior approval of the Commission, the trustee shall
have the exclusive power and authority to divest any of the remaining
assets to be divested.
3. Within ten (10) days after appointment of the trustee, respondent
shall execute a trust agreement that, subject to the prior approval of
the Commission and, in the case of a court-appointed trustee, of the
court, transfers to the trustee all rights and powers necessary to
permit the trustee to effect the divestitures required by this order.
4. The trustee shall have twelve (12) months from the date the Commission
or court approves the trust agreement described in Paragraph III.B.3.
to accomplish the divestitures, which shall be subject to the prior
approval of the Commission. If, however, at the end of the twelve-
month period, the trustee has submitted a plan of divestiture or
believes that divestiture can be achieved within a reasonable time,
the divestiture period may be extended by the Commission, or, in the
case of a court-appointed trustee, by the court; provided, however,
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the Commission may extend this 12-month period only two (2) times.
5. The trustee shall have full and complete access to the personnel,
books, records and facilities related to any of the remaining assets
to be divested or to any other relevant information, as the trustee
may request. Respondent shall develop such financial or other
information as such trustee may reasonably request and shall cooperate
with the trustee. Respondent shall take no action to interfere with
or impede the trustee's accomplishment of the divestitures. Any
delays in divestiture caused by respondent shall extend the time for
divestiture under this Paragraph in an amount equal to the delay, as
determined by the Commission or, for a court-appointed trustee, by the
court.
6. The trustee shall use his or her best efforts to negotiate the most
favorable price and terms available in each contract that is submitted
to the Commission, subject to respondent's absolute and unconditional
obligation to divest at no minimum price. The divestitures shall be
made in the manner and to the acquirer or acquirers as set out in
Paragraph II. of this order; provided, however, if the trustee
receives bona fide offers in any of the areas specified in this order
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for a supermarket to be divested from more than one acquiring entity,
and if the Commission determines to approve more than one acquiring
entity, the trustee shall divest to the acquiring entity or entities
selected by respondent from among those approved by the Commission.
7. The trustee shall serve, without bond or other security, at the cost
and expense of respondent, on such reasonable and customary terms and
conditions as the Commission or a court may set. The trustee shall
have the authority to employ, at the cost and expense of respondent,
such consultants, accountants, attorneys, investment bankers, business
brokers, appraisers, and other representatives and assistants as are
necessary to carry out the trustee's duties and responsibilities. The
trustee shall account for all monies derived from the sale and all
expenses incurred. After approval by the Commission and, in the case
of a court-appointed trustee, by the court, of the account of the
trustee, including fees for his or her services, all remaining monies
shall be paid at the direction of the respondent, and the trustee's
power shall be terminated. The trustee's compensation shall be based
at least in significant part on a commission arrangement contingent on
the trustee's divesting the assets to be divested to satisfy Paragraph
II.
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8. Respondent shall indemnify the trustee and hold the trustee harmless
against any losses, claims, damages, liabilities, or expenses arising
out of, or in connection with, the performance of the trustee's
duties, including all reasonable fees of counsel and other expenses
incurred in connection with the preparation for, or defense of any
claim, whether or not resulting in any liability, except to the extent
that such liabilities, losses, damages, claims, or expenses result
from misfeasance, gross negligence, willful or wanton acts, or bad
faith by the trustee.
9. If the trustee ceases to act or fails to act diligently, a substitute
trustee shall be appointed in the same manner as provided in Paragraph
III.A. of this order.
10. The Commission or, in the case of a court appointed trustee, the
court, may on its own initiative or at the request of the trustee
issue such additional orders or directions as may be necessary or
appropriate to accomplish the divestiture required by this order.
11. The trustee shall have no obligation or authority to operate or
maintain the assets to be divested.
12. The trustee shall report in writing to respondent and the Commission
every sixty (60) days concerning the trustee's efforts to accomplish
divestiture.
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IV.
IT IS FURTHER ORDERED that, for a period of ten (10) years from the date
this order becomes final, respondent shall not, without the prior approval of
the Commission, directly or indirectly, through subsidiaries, partnerships, or
otherwise:
A. Acquire any stock, share capital, equity, or other interest in any
supermarket or leasehold interest in any supermarket, including any facility
that has operated as a supermarket within six (6) months of the date of the
proposed acquisition, located in a) the Towanda, Pennsylvania area, which
includes the Borough of Towanda and the townships of Wysox, North Towanda, and
Monroeton; b) the Mount Carmel, Pennsylvania area, which includes the Borough of
Mount Carmel and the Township of Mount Carmel; and c) the Pittston, Pennsylvania
area, which includes the city of Pittston, the townships of Pittston and
Jenkins, and the boroughs of Dupont, Avoca, Hughestown, Duryea, Yatesville, and
Laflin, Pennsylvania.
B. Acquire any stock, share capital, equity, or other interest in any
entity that owns any interest in or operates any supermarket or owned any
interest in or operated any supermarket within six (6) months of the date of the
proposed acquisition in a) the Towanda, Pennsylvania area, which includes the
Borough of
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Towanda and the townships of Wysox, North Towanda, and Monroeton; b) the Mount
Carmel, Pennsylvania area, which includes the Borough of Mount Carmel, and the
Township of Mount Carmel; and c) the Pittston, Pennsylvania area, which includes
the city of Pittston, the townships of Pittston and Jenkins, and the boroughs of
Dupont, Avoca, Hughestown, Duryea, Yatesville, and Laflin, Pennsylvania.
Provided, however, that these prohibitions shall not apply to the
construction of new facilities or the leasing of facilities that have not
operated as supermarkets within six months of the date of the offer to lease.
V.
IT IS FURTHER ORDERED that:
A. Within sixty (60) days after the date this order becomes final and
every sixty (60) days thereafter until respondent has fully complied with the
provisions of Paragraphs II. or III. of this order, respondent shall submit to
the Commission verified written reports setting forth in detail the manner and
form in which it intends to comply, is complying, and has complied with
Paragraphs II. and III. of this order. Respondent shall include in its
compliance reports, among other things that are required from time to time, a
full description of the efforts being made to comply with Paragraphs II. and
III. of the order, including a
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description of all substantive contacts or negotiations for the divestiture and
the identity of all parties contacted. Respondent shall include in its
compliance reports copies of all written communications to and from such
parties, all internal memoranda, and all reports and recommendations concerning
divestiture.
B. One year (1) from the date this order becomes final, annually for the
next nine (9) years on the anniversary of the date this order becomes final, and
at other times as the Commission may require, respondent shall file verified
written reports with the Commission setting forth in detail the manner and form
in which it has complied and is complying with this order.
VI.
IT IS FURTHER ORDERED that respondent shall notify the Commission at least
thirty (30) days prior to any proposed change in respondent such as dissolution,
assignment, sale resulting in the emergence of a successor corporation, or the
creation or dissolution of subsidiaries or any other change in respondent that
may affect compliance obligations arising out of the order.
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VII.
IT IS FURTHER ORDERED that, for the purpose of determining or securing
compliance with this order, respondent shall permit any duly authorized
representative of the Commission:
A. Upon reasonable notice to respondent, access, during office hours and
in the presence of counsel, to inspect and copy all books, ledgers, accounts,
correspondence, memoranda and other records and documents in the possession or
under the control of respondent relating to any matters contained in this order;
and
B. Upon reasonable notice to respondent and without restraint or
interference from it, to interview respondent or officers, directors, or
employees of respondent in the presence of counsel.
VIII.
IT IS FURTHER ORDERED THAT this order shall terminate twenty (20) years
from the date this order becomes final.
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Signed this 9th day of January, 1995.
THE PENN TRAFFIC COMPANY, A CORPORATION
By: /s/ Martin A. Fox
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Martin A. Fox
Vice Chairman - Finance
/s/ Kenneth N. Hart
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Kenneth N. Hart
Donovan Leisure, Newton & Irvine
Counsel for The Penn Traffic Company
FEDERAL TRADE COMMISSION
By: /s/ Marimichael O. Skubel
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Marimichael O. Skubel
Attorney
Bureau of Competition
APPROVED:
/s/ Ronald B. Rowe
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Ronald B. Rowe
Assistant Director
Bureau of Competition
/s/ Mary Lou Steptoe
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Mary Lou Steptoe
Acting Director
Bureau of Competition
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