Justin L. Mack, and Keith Roysdon

IndyStar

Struggling grocery store chain Marsh announced Thursday morning that it has filed for Chapter 11 bankruptcy.

According to a news release, the filing is a step the company is taking to allow business to continue as usual in its 44 remaining stores.

However, the 86-year-old chain's remaining stores still face closure in two months if company officials can't find a buyer. The company has retained Peter J. Solomon Company as the investment bank to market its assets.

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"While today's decision was extremely difficult, we believe this action is necessary to preserve the value of the business as we seek a sale," Marsh Chief Executive Officer Tom O'Boyle said in a statement. "After reviewing every alternative, we concluded that Chapter 11 clearly provides the most effective and efficient means to ensure the best recovery for the company's stakeholders."

In its bankruptcy filing, Marsh says its property needs immediate action because "it includes perishable goods or assets that could quickly deteriorate or lose value without attention," including meat, dairy and produce.

The company estimated it has up to 49 creditors, estimated assets of up to $50,000 — the smallest amount that could be checked on the bankruptcy filing — and liabilities of $50 million to $100 million.

The filing includes a list of debtors to be consolidated under the bankruptcy filing and it includes names from Marsh's past, including LoBill Foods, as well as companies that it bought out, including former Muncie grocer A.L. Ross & Sons.

Creditors listed in the bankruptcy filing include the Delaware County treasurer's office, owed more than $277,000 for taxes; Central States Southeast and Southwest Pension Fund of Rosemont, Illinois, with an unsecured claim of more than $61 million; the Hamilton County treasurer's office, with taxes of more than $777,000 owed; Frito-Lay, owed more than $415,000; Keebler Company, more than $385,000; Pepsi-Cola and Coca-Cola bottlers, owed $335,000 and 709,000 respectively.

Marsh's filing lists only creditors with the 30 largest unsecured claims.

Marsh on Monday notified the Indiana Department of Workforce Development that it may be forced to lay off 1,535 workers at stores in Indianapolis, Greenwood, Carmel, Zionsville and other locations by July. In the WARN notice, Marsh officials blamed its financial problems on "unexpected difficulties and increased competition" that led to poor sales.

A company spokesperson later confirmed that all Marsh stores could close in that timeframe, and the stores mentioned in the WARN notice were listed because they have more than 50 employees per store.

The Chapter 11 filing allows daily operations to continue without interruption, according to the press releases. The stores will remain open, employees will be paid and goods and services purchased by Marsh be paid for in the ordinary course of business.

Founded in Muncie in 1931, Marsh grew over the decades with stores in Indiana and Ohio. At its peak, it operated more than 100 stories. In Muncie, Marsh outlasted other homegrown groceries such as Ross and Wise. After relocating its headquarters to Fishers in 1991, the company faced challenges from a changing supermarket industry and big sellers such as Wal-Mart and Meijer.

The Marsh family sold the company to Sun Capital, a Florida-based investment company, in 2006. Since that time, Marsh has closed some stores, remodeled and updated others and courted potential buyers for the chain. Some of the individual store buildings have been sold to investors though supermarket operations have continued.

This story will be updated.

Star Press reporter Keith Roysdon contributed to this story.

Call IndyStar reporter Justin L. Mack at (317) 444-6138. Follow him on Twitter: @justinlmack.