The parent company of Kings Food Markets and Balducci’s has filed for Chapter 11 bankruptcy, becoming the latest grocer to face financial challenges.
KB US Holdings requested bankruptcy protection Sunday in federal court in White Plains, N.Y. The company has a $75 million buyout offer from New York investment firm TLI Bedrock, according to the Wall Street Journal.
KB US Holdings bought Balducci’s in 2009. It operates 35 supermarkets — 25 Kings and 10 Balducci’s — in New York, New Jersey, Connecticut, Virginia and Maryland, according to the newspaper. The grocer has struggled in recent years with competition from online retailers, labor costs and pension obligations, according to bankruptcy filings cited by the Journal.
The challenges have led to cash flow problems, which resulted in the company defaulting on $114 million in senior debt.
The grocery stores received a lifeline from TLI Bedrock, led by real-estate investor Lawrence B. Benenson, which is planning to pay $75 million for KB’s assets. KB’s lender has also agreed to provide a $20 million bankruptcy loan so the stores can remain open prior to the sale.
Kings was founded in 1936 in Summit, N.J. It later opened stores along the railroad lines around New York City. Balducci’s was founded in 1915 as a fruit-and-vegetable stand in Brooklyn, according to the Journal.