The court overseeing the Chapter 11 bankruptcy case of Fleming has denied a request by US grocer Albertson’s to be let out of supply contracts with the US grocery distributor.
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Fleming, which filed for bankruptcy in April, said the contracts are necessary for it to complete a US$400m sale of its grocery wholesale business.
US bankruptcy judge Mary F. Walrath said the loss of the Albertson’s contracts could mean as much as $10m less in royalty revenue to Fleming. Only 40 of Albertson’s more than 2,300 stores are involved in the supply contracts.
Walrath refused Albertson’s plea to be let out of the contracts with Fleming because it would not be long before the contracts are either sold as part of the wholesale business, or ended as irrevocably breached, reported Dow Jones Business News.
Fleming is hoping to gain bankruptcy court approval for its planned sale of the wholesale business to C&S Wholesale Grocers.
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