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Pathmark Stores, Inc. Bankruptcy Filing
12 Months Ended
Oct. 31, 2015
Pathmark Stores, Inc. Bankruptcy Filing [Abstract]  
Pathmark Stores, Inc. Bankruptcy Filing

Note 16 – Pathmark Stores, Inc. Bankruptcy Filing

On July 19, 2015, the Great Atlantic & Pacific Tea Company and its affiliates, including Pathmark Stores, Inc. (“A&P”) filed for protection under Chapter 11 of the bankruptcy code as disclosed in the bankruptcy filings. A&P announced its intention to sell its assets and wind up its affairs. FREIT owns a 63,932 square foot store in Patchogue, New York with a carrying value of approximately $6.9 million as at October 31, 2015 that is leased to Pathmark, a subsidiary of A&P, and operated as a Pathmark Super Store. On December 23, 2015, FREIT was notified by A&P that this lease would be rejected as of December 31, 2015.

In accordance with GAAP, FREIT has been accounting for rental income from the store using the straight line method and accruing rent evenly over the lease term after taking into account scheduled future rent increases, with excess rent accrued over amounts received accounted for as a receivable on the consolidated balance sheets. At October 31, 2015, approximately $1,046,000 remains as a straight line rent receivable. FREIT has recorded an expense in the fourth quarter of Fiscal 2015 of $1,046,000 ($0.15 per share basic and diluted) for provision for loss related to the straight line rent receivable for Pathmark. The provision has no impact on cash flow or funds from operations. However, as a result of the lease being rejected, FREIT will lose annual rents of approximately $1.4 million until the store is re-leased. As a result of the rejection of the lease, FREIT has assessed the real estate for impairment and determined that no impairment exists at October 31, 2015.