A day after denying it was filing for Chapter 7 bankruptcy, Fairway Market has announced that it has filed for Chapter 11 bankruptcy protection. The company has entered into a stalking horse deal with Village Super Market (VLGEA) and will sell up to five stores and its distribution center for about $70 million.

The company said it will also negotiate the sale of its remaining stores under a court supervised sale process and has secured up to $25 million in debtor-in-possession financing. The company has a total of 14 stores in operation.

Fairway Market does not expect any disruption in its operations during the process and said it will continue to conduct business as usual across all its stores. The company’s loyalty programs will also continue to be honored.

"We would like to extend gratitude to our employees, vendors, distributors and customers for their support, dedication and loyalty over the years,” Abel Porter, CEO at Fairway Market said in a statement.

“It has always been Fairway's priority to ensure our patrons are provided with the most optimal grocery experience, with the freshest foods and best quality products, and our employees feel appreciated.

“After careful consideration of all alternatives, we have concluded that a Court-supervised sale process is the best way to meet our objectives of preserving as many jobs as possible, maximizing value for our stakeholders, and positioning Fairway for long term success under new ownership."

If Village Super Market secures the bid for Fairway Market, it said it will keep the company’s name as well as its product selection. Village Super Market operates supermarkets and specialty stores under the ShopRite and Gourmet Garage brands.

Fairway Market has hired Weil, Gotshal & Manges, LLP as its legal counsel and PJ Solomon as its investment banker. Mackinac Partners is serving as its financial advisor.

Shares of Village Super Market stock were up 0.67% as of 11:00 a.m. EST on Thursday.