PARSIPPANY, NJ - The parent company of Kings Food Markets and Balducci's Food Lover's Market, KB US Holdings, Inc., announced it has filed for Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of New York. The filing follows a buyout offer from New York investment firm TLI Bedrock, LLC for $75 million.
The high-end grocery chain operates 35 supermarkets, including Balducci's, in New York, New Jersey, Connecticut, Virginia and Maryland and employs more than 2,100 people.
According to court documents filed on August 20th, the parent of Kings Food Markets retained Ankura Consulting Group, LLC nearly two years ago to "provide KB financial advisory services in connection with KB's evaluation and development of strategic alternatives and to assist KB in its negotiations with creditors."
The filing asserts as a result of increasing competition in the highly competitive retail food industry, KB experienced lower earnings and increased debt as well as strains on the company's liquidity and cash flow. Thusly, KB has experienced multiple defaults and unable to pay regularly scheduled principal and interest payments to lenders since 2018. Outstanding debt obligations are approximately $114 million.
Though the COVID-19 pandemic increased sales, months leading up to the Chapter 11 cases "created unique challenges and pressures on the debtors and their senior management team", according to M. Benjamin Jones, Senior Managing Director of Ankura Consulting Group in the filing.
Kings was founded in 1936 with its first store in Summit, NJ and expanded over the years along the railroad lines in the New York City suburbs. It changed its name to Kings Food Markets in 2012. Headquartered in Parsippany, NJ Kings has stores throughout the state including Short Hills, Verona, Montclair, Maplewood, Livingston, Chatham, Hoboken, Morristown, Florham Park and several other townships.
Kings will continue to operate until the bankruptcy agreement is executed.