Pathmark Tries to Shake Off Bankruptcy Woes

CARTERET, NJ-Pathmark, the supermarket chain, based here, has cut a deal with some of its creditors, trading almost $1 billion in debts for ownership of the company. Pathmark’s 137 stores in the Northeast include 62 in New Jersey. The company has been a major food retailer in the Garden State for years.

Pathmark had been privately held for the last 13 years, slipping into Chapter 11 last summer after years of financial woes. At its filing, the company submitted a prepackaged reorganization plan that had the support of bondholders. Pathmark has also closed on a $600 million financing package from a group of institutions led by Chase Manhattan.

The chain’s new ownership consists of several mutual funds, led by Fidelity Investments. No longer privately owned, the company will begin trading common stock and warrants shortly, according to officials.

The company’s enormous debt traces back to a leveraged buyout 13 years ago.