Nov 19, 2009 9:46 AM

Syracuse NY-based supermarket operator Penn Traffic Co has filed for Chapter 11 protection in a Delaware court. The company intends to remain open and will try to sell its stores and other assets while in bankruptcy. The company said in a statement it plans to offer this arrangement for approval by the US Bankruptcy Court, District of Delaware at a hearing.

Penn Traffic operates supermarkets in upstate New York, Pennsylvania, New Hampshire, and Vermont under the Bi-Lo Foods, Quality Markets, and P&C Foods names.

In order to ensure sufficient liquidity to maintain ongoing operations in the face of current lender defaults, Penn Traffic’s board of directors determined that the interests of the company’s creditors and other stakeholders would be best served by seeking Chapter 11 bankruptcy protection to facilitate an orderly sale of its stores and other assets with the consent of its senior secured lenders.

“Our P&C, Quality, and BiLo supermarkets remain open for business to serve our customers and communities,” said Gregory J Young, president and chief executive officer.

In court documents, Penn Traffic indicated assets of $150.4 million and debt of $136.9 million.