A&P Bankruptcy News: New APA's Signed by Wakefern & Morton Williams

Today two Asset Purchase Agreements (APA) were signed and presented to the bankruptcy court for approval. One of the APA's is for 12 A&P stores being purchased by Wakefern. Two of the twelve stores, Pathmark's 649 and 653, are represented by us, Local 1500.   As you may know, Wakefern is a Co-Op, and as of right now the specific owner who made the bids has not been publicly identified. Wakefern's bids have been designated as Stalking Horse, just like Acme's & Stop & Shop's bids. A stalking horse offer, agreement, or bid is an attempt by a debtor to test the market in advance of an auction. The intent is to maximize the value of its assets as part of (or before) a court auction in case of bankruptcy. Morton Williams has also signed an APA on three Food Emporium stores in New York City. As of 12:30 this afternoon, A&P notified the court of its intention to the extend the deadline for bids yet again. The new deadline is now Monday, Sept. 28th at 5pm.  A&P attorneys claim this is due to the continued influx of new bids and new bidders on the stores that will be in the auction.  Based on the court documents we believe that the qualifying bids on all stores will be made public by Monday at 5 PM. Today's meeting with Key Food was canceled due to a last minute scheduling conflict, once it is rescheduled we will let you know.  For all archived Pathmark updates, vist: www.ufcw1500.org/pathmarkupdates Last Update: 9/25: Update on A&P Auction, Key Food & Stop & Shop.

—IMPORTANT A&P BANKRUPTCY DATES — Friday, September 11th The Bankruptcy Court will hear UFCW's objections to A&P’s KERP (corporate bonus plan). Monday, September 28th (tentative) Bid Deadline: All qualifying bids on the stores are due into the Bankruptcy Court. The Bankruptcy Court will announce what Tier I stores have agreements to be sold and what stores will be sold at the auction on 10/1 & 10/2. Thursday, October 1st and/or Friday, October 2nd The auction for the remaining unsold and or closed stores will be held (depending on number of stores, dates could extend). Friday, October 2nd (tentative) Bidders can file objections to the sale of stores in the Bankruptcy Court. The UFCW can also file objections to bids made on the stores. Friday, October 16th A hearing will be held regarding the objections to the sales filed to the Bankruptcy Court. At this stage, the UFCW will have a voice during the auction process to make recommendations on bidders. For instance, if two companies place a comparable bid on the same store and one is a union employer, while the other is non-union, the unionized store would have an advantage and they should likely win the bid. A hearing will be held on A&P's filing of a 1113(c). Bid winners will be formally announced. —UPCOMING UNION EVENTS — Resource Fairs: You may have read that we will be hosting workshops and resource fairs for members displaced by the A&P bankruptcy in our September Newspaper.  Our first Member Resource Fair will be on October 7th at our Union Hall (425 Merrick Ave. Westbury, NY) from 9:30 AM - 6:00 PM (you may come and leave at anytime). If you're interested in attending please RSVP here.  There will be two other fairs in our area, one in Suffolk County on October 15th at IBEW Local 25 in Hauppauge, RSVP here. There will also be a Fair in New York City.  The New York City date is still tentative, once it is confirmed we will let you know. In the meantime you can visit www.ufcwmemberresources.com for more information.

Pathmark Bankruptcy Update: 9/25

On Monday our union along with Locals 338 and 342, continued meeting with Key Food regarding their acquisition of our Pathmark stores. All of our Local Unions are negotiating together as we did with Stop & Shop and Acme. Negotiations are progressing, and we will all meet again today (Friday 09/25). 

Bankruptcy Court Updates: On Monday Stop & Shop and Acme's purchases of A&P stores were approved by Bankruptcy Judge Drain.

Acme’s original 77 store bid has been reduced to 71. Stop & Shop has been out-bid for the A&P store in Mount Kisco reducing their count of stores to 24.  However, Stop & Shop still has the opportunity to bid higher during the auction.

The Auction: The remaining stores will be auctioned on Thurs. 10/1 and Fri. 10/2 (and if necessary Mon. 10/6 & Tues. 10/7).  We will have representatives at the auction on all dates and will keep you posted on any information that breaks during the auction.

We have been told that there are more than 120 bids submitted for stores in the auction, BUT we do not have any knowledge of how many stores were actually bid on OR who all the potential bidders are. We are still working with all of our Employers and trying to help them to purchase additional stores during the auction.

There will be no final 1113/1114 hearing until after the auction has been completed …. Currently it is scheduled for 10/7/16 (subject to change).

Store Transitions: The transition plans for the Pathmark stores purchased by Stop & Shop are starting to become clear.  The first three of our stores, Pathmark's 619, 626 & 661, will begin transitioning to Stop & Shop next week. 

Stop & Shop will start the application & interview process on Tuesday 09/29/15, and then follow with orientations for the membership in the days that follow.

Resource Fairs: You may have read that we will be hosting workshops and resource fairs for members displaced by the A&P bankruptcy in our September Newspaper.  Our first Member Resource Fair will be on October 7th at our Union Hall (425 Merrick Ave. Westbury, NY) from 9:30 AM - 6:00 PM (you may come and leave at anytime). If you're interested in attending please RSVP here. 

There will be two other fairs in our area, one in Suffolk County on October 15th at IBEW Local 25 in Hauppauge, RSVP here. There will also be a Fair in New York City.  The New York City date is still tentative, once it is confirmed we will let you know. In the meantime you can visit www.ufcwmemberresources.com for more information.

Please do not hesitate to contact us for any questions, concerns or issues.

Thanks again,

Bruce W. Both

President

UFCW Local 1500

For all archived Pathmark updates, vist: www.ufcw1500.org/pathmarkupdates

—IMPORTANT A&P BANKRUPTCY DATES —

Friday, September 11th The Bankruptcy Court will hear UFCW's objections to A&P’s KERP (corporate bonus plan).

Monday, September 21st (tentative) Bid Deadline: All qualifying bids on the stores are due into the Bankruptcy Court. The Bankruptcy Court will announce what Tier I stores have agreements to be sold and what stores will be sold at the auction on 10/1 & 10/2.

Thursday, October 1st and/or Friday, October 2nd The auction for the remaining unsold and or closed stores will be held (depending on number of stores, dates could extend).

Friday, October 2nd (tentative) Bidders can file objections to the sale of stores in the Bankruptcy Court. The UFCW can also file objections to bids made on the stores.

Friday, October 16th A hearing will be held regarding the objections to the sales filed to the Bankruptcy Court. At this stage, the UFCW will have a voice during the auction process to make recommendations on bidders. For instance, if two companies place a comparable bid on the same store and one is a union employer, while the other is non-union, the unionized store would have an advantage and they should likely win the bid. A hearing will be held on A&P's filing of a 1113(c). Bid winners will be formally announced.

Recent A&P posts:

UFCW Local 1500 files official objections to A&P's KERP plan (corporate bonus plan)

Bankruptcy Ruling on Severance & Bumping

A&P Bankruptcy Update: Key Food, Stop & Shop Negotiations & New Bid Date

This week our union along with Locals 338 and 342, continued to meet with Stop & Shop and Key Food regarding their acquisition of our Pathmark stores. 

Yesterday we met with Key Food late into the night and made significant progress. Negotiations will resume with Key Food on Monday.  

We met with Stop & Shop all day Wednesday and again today. After a very long negotiating session, we've come to a tentative agreement with Ahold (Stop & Shop) on the 12 Pathmark stores they will be acquiring. The tentative agreement preserves the jobs, benefits, rates of pay and entitlements of all Pathmark members in the 12 stores. 

Bankruptcy Court Procedures Update: We are aware how stressful and anxious the situation is for our Pathmark members working at a store that is currently unsold. Late last night we were notified that the bidding deadline has again been moved.

Our professionals and attorneys have advised us that new bidders are coming to the table with new offers every single day.  The final bids on A&P stores are now due in the court Monday, Sept 21st by 5 PM.  The bids will not be public and we will not officially know who is bidding on what store until the auction process is completed.

Our Union Team is diligently working to save jobs.  We will continue to meet with all companies and will not stop fighting to save the benefits, entitlements and jobs of all men and women working for A&P have earned and families depend on.

Today's A&P Bankruptcy Update

Today the bankruptcy judge heard our objections to A&P's KERP (corporate bonus plan). A&P had filed to hand out over $5 million in bonuses to corporate employees. In leiu of the objections, A&P presented a proposal for $3.9m in bonuses. The judge would not approve the $3.9m, unless they included the additional $1.1 million to the UFCW members' severance packages. Read the article here: http://www.northjersey.com/news/judge-will-not-ok-retention-plan-unless-a-p-increases-severance-payments-1.1408287.

Additionally upcoming procedure dates have also been modified:

New dates:

Bid deadline – 9/17/15
Auction – 10/1 and 10/2
Sale Hearing – 10/16/15
1113(c) Hearing – 10/16/15

We've updated the chart below to reflect the new dates, please keep them for your records.

Please do not hesitate to contact us for any questions, concerns or issues.


Thanks again,

Bruce W. Both
President
UFCW Local 1500

—IMPORTANT A&P BANKRUPTCY DATES —


Friday, September 11th
The Bankruptcy Court will hear UFCW's objections to A&P’s KERP (corporate bonus plan).

Thursday, September 17th
Bid Deadline: All qualifying bids on the stores are due into the Bankruptcy Court.

Monday, September 21st (tentative)
The Bankruptcy Court will announce what Tier I stores have agreements to be sold and what stores will be sold at the auction on 10/1 & 10/2.

Thursday, October 1st and/or Friday, October 2nd
The auction for the remaining unsold and or closed stores will be held (depending on number of stores, dates could extend).

Friday, October 2nd (tentative)
Bidders can file objections to the sale of stores in the Bankruptcy Court. The UFCW can also file objections to bids made on the stores.

Friday, October 16th
A hearing will be held regarding the objections to the sales filed to the Bankruptcy Court. At this stage, the UFCW will have a voice during the auction process to make recommendations on bidders. For instance, if two companies place a comparable bid on the same store and one is a union employer, while the other is non-union, the unionized store would have an advantage and they should likely win the bid.

A hearing will be held on A&P's filing of a 1113(c).

Bid winners will be formally announced.

A&P Bankruptcy Procedure Dates

Keeping you up to date on all A&P news, we have created a chart below of upcoming scheduled bankruptcy court procedures for your records. 

—IMPORTANT A&P BANKRUPTCY DATES —

Friday, September 11th 

• All qualifying bids on the stores are due into the Bankruptcy Court.The Bankruptcy Court will hear UFCW's objections to A&P’s KERP (corporate bonus plan).

 Monday, September 21st 

• The Bankruptcy Court will announce what Tier I stores have agreements to be sold and what stores will be sold at the auction on September 24rd or 25th.
  

Wednesday, September 24rd and/or Thursday, September 25th 

• The auction for the remaining unsold stores will be held. All qualifying bids on the stores are due into the Bankruptcy Court. The Bankruptcy Court will hear UFCW's objections to A&P’s KERP (corporate bonus plan). 

Friday, October 2nd 

• Bidders can file objections to the sale of stores in the Bankruptcy Court. The UFCW can also file objections to bids made on the stores. 

Wednesday, October 7th 

• A hearing will be held regarding the objections to the sales filed to the Bankruptcy Court. At this stage, the UFCW will have a voice during the auction process to make recommendations on bidders. For instance, if two companies place a comparable bid on the same store and one is a union employer, while the other is non-union, the unionized store would have an advantage and they should likely win the bid. Thursday, October 15th The winning bids of the stores will be formally announced. 

Recent A&P posts:

UFCW Local 1500 files official objections to A&P's KERP plan (corporate bonus plan)

Bankruptcy Ruling on Severance & Bumping

A&P's Greed is Shameful

Over the last few years working in uncertainty for Pathmark has put tremendous stress on you and your families. Since the latest bankruptcy filing, the unclear future has impacted our entire union.  Please know that we are working each day, exhausting all our resources to prevent stores from closing and to save as many jobs as possible.
 

We, along with representatives of the UFCW International, the affected UFCW Local Unions and our Attorneys, have met with representatives from A&P to discuss critical issues in the bankruptcy.

We discussed issues such as the sales process, to find out the company’s plans and motives to sell the remainder of its stores. We also deliberated with the company on their proposed modifications to our already modified contracts.

A&P is again proposing “adjustments” to our contracts that stand to eliminate or alter many of our contractual protections and benefits previously negotiated. These terms will most likely diminish the value of A&P’s assets and threaten thousands of jobs. Here are some concessions A&P and the purchasers of their stores are seeking:

•   Displacing workers with seniority (elimination of bumping rights)

•   Limiting your right to strike

•   Letting non-union workers come into your stores and do your jobs

•   Reducing or eliminating your severance pay

•   Reduce Full-Timers

Each one of these issues was discussed with urgency and we collectively conveyed this message to A&P: our members have already sacrificed more than enough. These proposals are very sensitive, they stand to affect thousands of families throughout the Northeast.

Our attorneys continue to meet with Judge Drain at the US Bankruptcy Court for the Southern District. Preventing A&P from using the bankruptcy court (again) as a weapon to prey on hard-working men and women like you in order to put more money in their pockets is what we are fighting for in the court.

These past few months we have fought very hard to protect what every Pathmark member has earned and deserved, and we do not plan to on stopping. We will do everything in our power to make A&P honor their responsibilities to every member and their families.

UFCW International President Marc Perrone has been very active in voicing his support and solidarity.  He has voiced our collective concerns to the Board of Fortress Investment Group, the financing firm hired by A&P.

We will continue to meet with the company and discuss the matters at hand. I must encourage you all to not buy into the rumors you hear throughout the stores. There are many rumors circulating throughout all A&P stores and throughout social networks. Do not empower them by continuing to spread them. Once we have any factual information, you will be immediately notified.

All of the UFCW Local Unions remain in constant contact. We are united and are continuing to meet with potential buyers to discuss their acquisition of stores, and continue to meet with and urge our union employers to place bids on the unsold stores.  

Stay strong, now, more than ever. You have the support, the backing and the solidarity of our entire 22,500 member union.


Bruce W. Both is President of UFCW Local 1500, New York's largest grocery workers union

UFCW Files Objections to A&P KERP

Today, our union attorneys, along with the UFCW International attorneys, filed official objections against A&P's KERP plan. The KERP plan is a fancy acronym for a management bonus plan, A&P seeking to pay up to $5m in bonuses to certain corporate employees.  The argument on the KERP is scheduled for next Friday.

Below are our official filed objections:

1.              All of A&Ps employees are working hard in the face of uncertainty regarding their future.  At the same time it was seeking approval to reduce the timely payment of severance for its 26,000  employees represented by the Unions, the Debtors filed this Motion  seeking authorization to pay other employees an additional $5 million in retention payments.[1]

2.              The Debtors are proposing a retention plan where approximately 20% of the available funds would be paid to 11 employees.  See Motion at ¶6, n.2.   In fact, under the proposed plan, at least some of the Debtors’ employees will receive an additional $125,000, id., at the same time its rank-and-file union employees are losing contractual rights.[2]

3.              As part of the reason for not including union employees in the KERP who will be the face of A&P to its customers at the closing stores, and in contrast to the situation in Hostess, the Debtors assert that the payment to union members would be too small—only a few hundred dollars—to retain its employees.  See Motion at ¶7.  For UFCW-represented workers, many of whom work part-time and do not earn more than a few hundred dollars a week and are faced with unemployment in the near future, payment would be helpful, whether or not they would seem too small to management.

4.              It is also important to note that the Debtors set aside about $6 million in a trust for six individuals, apparently members of its senior management team, to ensure they would be paid, including apparently $2.5 million for one individual (along with many hundreds of thousands of dollars in Board and consulting fees),  and $1.5 million for two other individuals.  See Motion Of Debtors Pursuant To 11 U.S.C. §§ 105(a), 363 And 507(a) For Interim And Final Authority, But Not Direction, To (A) Pay Certain Prepetition Wages And Reimbursable Employee Expenses, (B) Pay And Honor Employee Medical And Other Benefits, And (C) Continue Employee Benefits Programs, And For Related Relief at ¶¶15-18 [Docket No. 14]; Statement of Financial Affairs, Section 3c [Docket No. 721] at, e.g., 416, 430, and 434 (showing distributions on behalf of certain unnamed individuals to trust and monthly payments to certain members of Board ).

5.              Section 503(c) of the Bankruptcy Code limits the payment of retention bonuses by prohibiting transfers outside the ordinary course of business unless justified by the facts and circumstances of the case.  The enactment of Section 503(c) was a result of increasing public sentiment against the practice of executives of bankrupt companies generously rewarding themselves during restructuring at the same time that rank-and-file workers were suffering tremendous economic blows as a result of the bankruptcy.  See generally In re U.S. Airways, Inc., 329 B.R. 793, 797 (Bankr. E.D. Va. 2005).

6.              Congress’ purpose in enacting new Section 503(c) could not be more clear:  key employee programs when justified at all should be limited and based upon actual, demonstrable need rather than on speculation and largesse.  The Section 503(c) provisions support rigorous scrutiny of the Debtors’ proposed retention agreements given Congress’ clear intent that such obligations be strictly regulated, and not deferential and presumptive reliance on the Debtors’ articulated rationale.

7.              The court in In re Dana Corp. set forth the factors that should be considered in evaluating motions for enhanced compensation under Section 503(c)(3):
“[1]  Is there a reasonable relationship between the plan proposed and the results to be obtained. . . in the case of a performance incentive, is the plan calculated to achieve the desired performance?;

[2]  Is the cost of the plan reasonable in the context of the debtor’s assets, liabilities and earning potential?;

[3]  Is the scope of the plan fair and reasonable. . .?;

[4]  Is the plan consistent with industry standards?;

[5]  What were the due diligence efforts of the debtor in investigating the need for a plan; analyzing which key employees need to be incentivized. . . .; [and]

[6]  Did the debtor receive independent counsel in performing due diligence and in creating and authorizing the compensation?”

358 B.R. 567, 576-77 (Bankr. S.D.N.Y. 2006) (emphasis in original).

8.              The Debtors’ use of average compensation to justify the program deflects the fact that that the top 11 employees are receiving substantial payments in relation to their annual salaries, see Declaration of Christopher W. McGarry in Support Of The Debtors’ Motion For Entry Of An Order Approving Debtors’ Key Employee Retention Plan For Certain Non-Insider Employees [Docket No. 654] at ¶15 (noting highest paid employee in KERP program is paid $285,000 per year and the highest payment is $125,000), while only being required to continue to work through either October 10, 2015 or December 12, 2015.  Thus, while union-represented employees are receiving only 52% of their severance payments upon store closing under the Section 1113(e) relief, and lost key bumping rights, at least some of the key employees will be receiving nearly half of their salary to work between one and three months.

9.              Moreover, the proposed KERP does not have any demonstrated relationship to the success of the Debtors’ sales process, even though the Debtors consistently note that the maximizing the recovery at these auctions is the primary goal of the Debtors.  See Motion at ¶1.

10.           The Debtors have not met their burden of proof, In re Pilgrim’s Pride Corp., 401 B.R. 229, 236-237 (Bankr. N.D. Tex. 2009), to show, for example, the reasonable relationship to the results to be obtained, reasonableness in light of the particular debtor involved, fairness, and consistency with industry standards.  See In re Global Home Products, LLC, 369 B.R. 778, 784 (Bankr. D. Del. 2007).

11.           For a Debtor with thousands of employees facing uncertainty regarding their future and whose efforts are key to the estate and the sales process, the Debtors’ proposed  KERP program inequitably and inappropriately seeks to reward 495 employees.

Please visit our Pathmark update page for all archived updates.

Celebrating Labor Day

By: Bruce W. Both

Each Labor Day we celebrate the many accomplishments that organized labor has helped to create for all American workers.  The five day work week, the 8-hour work day, child labor laws and holiday pay are just a few that come to mind.  Looking forward, the fight for better rights for hardworking men and women will never end, and there is still much work to do.

As the gap between the wealthy few and the rest of America continues to grow, more must be done to address the millions of Americans who are struggling to provide for their families in part-time, low-wage jobs. 

Here in New York too many workers are struggling to stay afloat in a fragile economy.  Men and women alike are forced to take on two, three and sometimes four jobs to support their families. New York likes to flaunt itself as a progressive capital, yet the local laws protecting workers and wages don’t stack up against other states like Vermont, Washington and Rhode Island.  This should be seen as unacceptable when you consider how expensive it is to make ends meet while living in New York.

The national opinion on these issues is shifting in favor of workers.  The latest results from the 2015 installment of Gallup’s annual Work and Education survey show that Americans’ approval of labor unions has jumped five percentage points to 58% over the past year, and is now at its highest point since 2008, when 59% approved. Consistent with the recent increase in approval of unions, the percentage of Americans saying they would like labor unions to have more influence in the country has also been rising, and now stands at 37%, up from 25% in 2009. Meanwhile, the percentage wanting unions to have less influence has declined from 42% to 35%. 

America wants better treatment, better jobs and higher wages for working men and women, so why can’t they get it?  
As union members, we all have what every worker in our country should want: respect, a voice at work, better benefits, wages, representation and protection from greedy corporations.

Congressional Republicans and their corporate backers have stuck to the same old, tired argument that raising wages, and reforming the National Labor Laws will be bad for businesses. Attacking these ideals and hard working men and women who are fighting to better their lives to support their families, not only divide our country but our communities as well. We know that by joining together, we can make both working conditions and companies better.

That’s what Labor Day is about.




We all want the same thing, better jobs, better communities, and a better country. We can only achieve them by working together, not by divisive attacks that further separate us further.

UFCW Local 1500 salutes all of our union employers for employing and partnering with the hard working men and women who make their stores and their companies better. Please remember these Union members who help you every single day of the year while you’re enjoying your Labor Day.  Happy Labor Day!

Key Food Negotiations Problems Report

Keeping you updated on all A&P news, the NY Post ran a story today regarding our negotiations with Key Food.  Here's a snip from the story:

Key Food, along with Stop & Shop and Acme, announced plans in July to buy 118 of the 300 A&P stores.

But union officials representing 28,500 workers in the A&P bankruptcy say that while negotiations with the latter two have been productive, the talks with Key Food have not.

Key Food wants to slash the number of full-time jobs and maintain only the lowest-paid part-timers...

Please read the entire NY Post story here. 

We are continuing to meet with all employers to save jobs and have them purchase A&P stores. We must stress, we want to have Key Food as buyers for the stores, however, their demands are unacceptable. We are fighting to save the jobs, benefits and entitlements that all men and women working for A&P have earned and families depend on.

UPDATE ON A&P BANKRUPTCY AND THE ISSUE OF SEVERANCE & BUMPING

UPDATE ON A&P BANKRUPTCY AND THE ISSUE OF SEVERANCE & BUMPING


September 2, 2015

From the announcement of A&P’s bankruptcy, we know how difficult this process has been for you and your family. From the very start, we’ve made clear we will fight as hard as we can for the benefits and wages you’ve earned with your hard work.

As part of our efforts to keep you informed of any and all developments, we wanted to make you aware of the latest developments, specifically as it relates to severance and bumping.

Yesterday, a hearing before the U.S. Bankruptcy Judge focused on those two issues, and we have made clear to the judge, that you and your family sacrificed for the company to succeed. These sacrifices are real and that A&P must meet its responsibilities.

In terms of severance payments, the judge strongly urged A&P to get the necessary financing from its lenders to increase severance pay for those laid off from the initial 25 closing stores to 52%. The judge is also urging A&P to pay an upfront severance payment that better reflects your years of dedicated service to your community and this company. After the 52%, members will qualify for additional severance payments depending on the outcome of store sales and other issues.

We know that this severance should be higher, and that this amount is not what you deserve, but we want you to know that we are fighting as hard as we can to increase this severance.

In terms of bumping, the judge did authorize changes to the bumping provisions in our contracts. He ruled that the Locals can only put a bumping plan in place that does not cost A&P any more money.

Locals were only given until Thursday, September 3rd, to complete this process. The tight deadline makes executing a plan like that impossible. 

Finally, we want to thank you for the actions that so many of you have taken throughout this terribly difficult process. You have made a huge impact during these proceedings.

The judge made a point to recognize all of your efforts including submitting personal letters to him, sending our petition with thousands of our signatures, and recognizing our brave members who testified in court.

Because of your efforts, we were able to put a face to this bankruptcy and made our voices heard when the company tried to silence them. You told your stories of dedication and sacrifice for the company and stressed the turmoil that A&P’s failed strategies and the bankruptcy has had on you, your family and your community.  

In short, by working together you’ve made a difference to everyone who is part of our union and A&P family.


Please visit our Pathmark update page for all archived updates.