Georgia Attorney Lawyer

GARY Hirsch, President of $ 3 billion wholesale and retail grocery Penn Transportation Co., not by training in his dark suit. He stops access in a pocket of cookies. “What is the rosbif?” He sings in a deli companions. Then he launches into a discourse on four different types of ground beef the store offers. Hirsch said: “I feel good in my role.”

Hirsch can be used alone in this assessment. Its management has Penn transport bankrupt. Shareholders have been decimated, employees at work and Obligationären, including Loomis Sayles & Co. and the Metropolitan Life Insurance Co., lost about $ 600 million to $ 1 billion in total it has awarded to the company.

But Hirsch is not everywhere. His investment company has extracted $ 20 million for the cost of transporting Penn since 1988. And if Penn Traffic bankruptcy again this year, borrowing has left more than run, Syracuse, NY-based company’s office in Rye, about 200 kilometers, an annual salary of $ 475000.

Officially, the traffic is now Penn, which is regarded as “the debtor on its own terminal.”

Bankruptcy law allows the management result was that a company into bankruptcy judicial execution (see story, p. 115). Often, creditors not to raise. Insider dealing, after all, where are buried errors.

Maybe they can rescue the company.

But this is not the first company that has ruined Hirsch. Before the problems began in Penn Traffic, deer - specializes in leveraged buyouts - Grand Union Presidency, $ 2.5 billion (turnover) of New Jersey-based food chain, from 1989 to 1996. Hirsch continued to 250 store chain bankruptcy in 1995. The chain of bankruptcy later this year but had to again file for Chapter 11, three years later. He is currently in bankruptcy - for now. Obligataires also a haircut to another company, deer hit appointed Van Dusen Airport Services Co. ’s Hirsch investment firm acquired in the late achtziger and sold it shortly afterwards, with a small Thursday In 1990, the company responsible for the debt, default on its obligations.

Then paste it all and a deer in the past ten years - while a powerful bull - burned to $ 1.8 billion in money from investors, in principle, on losses and debts down the value of stocks. (Hirsch is not the height.)

Hirsch, 49, is an accountant by training, has spent eight years at Price Waterhouse before joining in 1981, the LBO business. He Penn traffic by a combination of three regional food retailer. The original Penn Traffic was a Johnstown, Pa-based food wholesalers and retailers. During 1987, deer private companies for $ 131 million by his investment firm, deer tobacco Miller & Co. In 1988, it adopted Hirsch Penn public transport, an increase of $ 25 million, then added a Syracuse-based P & C-Food Markets for $ 219 million. In 1989, Penn has acquired the transport chain Ohio Big Bear for $ 341 million. The same year, another investment, deer and Salomon Brothers acquired Grand Union corporate raider Sir James Goldsmith for $ 1.2 billion, indeed, including debt.

In 1990, Hirsch, Penn Transport and Grand Union, Galantamin a $ 6 billion supermarket empire stretching from Georgia, Vermont.

The operation could prosper only if Hirsch had stuck to its financial transactions and food merchandisers left to run stores. He did.

“You have a banker, said he is a trader, and it is not,” said Michael Knilans, Big Bear has expired for over ten years ago Hirsch has acquired the company. “When I had lunch with a nuclear researcher, before lunch, he would say was, type, as an atomic bomb.”

A deer theory: Customers know the price only a handful of grocery items. He cites the results of focus groups there.

Fair enough, but Hirsch has been unable to translate, an effective strategy for the discount.

For example, a recent newsletter of its Big Bear stores in Ohio featured prominent bananas to 39 cents per pound. But a circular Kroger a neighbour, it was 10 cents advertising cheap. Hirsch also selected Food Club chunk light tuna for 39 cents, if a brand Premium Star Kist has participated in Meijer for only 10 cents.

Hirsch’s supermarket empire to collapse began a decade ago. In early 1990 Grand Union there is a huge $ 150 million charge annual interest rate of deer’s Junk Bond financing. Companies can not afford to upgrade-store inside or maintain their own wars in the price. “We could very high price in a market, but Gary think we were good prices,” said Frank Breen Jr., has expired, Grand Union’s Northern Division just before the first declaration of bankruptcy.

Meanwhile, Hirsch had shifted its attention on trafficking Penn - too much attention. Former employees of the silent era is deer circumvented its own regional buyers strike. For example, according to Stephen headquarters - deer worked for eight years at Big Bear, two of them as chairman - in the mid 1990, deer helped engineer a business to buy and promote, Georgia - Pacific’s Angel Soft toilet paper, a second stage mark Procter & Gamble Charmin brand. The assumption was that Penn Traffic could earn higher gross margins with an aggressiveness of Georgia-Pacific brand. But the promotion of Angel Soft meant that traffic was unable to feature Penn Charmin equally clearly, to end the alienation of customers, said the headquarters. Hirsch, but denies that the Angel Soft Penn much affect the transport capacity in the commercialization of Charmin.

In late summer 1996 Penn Transport Chief Executive John Dixon retired and began to steal deer, at regular intervals on the various divisions’s Weekly meeting ad-copy, which are often variables, which allegedly occurred this week in the display . With the company struggling under a heavy debt burden, former leaders, whose headquarters, saying that traffic Penn pushed higher prices charged to the turnover. Hirsch denies that. During the year, that the end of February 1, 1997 EBIT (earnings before depreciation, interest and taxes) decreased by 25% to $ 176 million