EXHIBIT 99.1
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[GRAPHIC OMITTED]
[LOGO - THE PENN TRAFFIC COMPANY]



                                                      May 2, 2007


Mr. Tod A. Nestor
2127 North Villa Court
Gibsonia, PA 15044

Dear Tod,

On behalf of Robert Panasuk, President and CEO, we are pleased to offer you the
position of SENIOR VICE  PRESIDENT,  CHIEF FINANCIAL  OFFICER.  Your employment
will  commence  on May  14,  2007.  While  this  letter  is  not a  contractual
agreement, it does contain the major elements of our offer to you.

1.    SALARY.   Your  starting  salary  will  be  $275,000.00  per  year,  less
      applicable withholdings,  with a performance and salary review within the
      first six months of employment in this role.

2.    SIGN-ON BONUS.  $50,000  "grossed up," payable in 3  installments.  First
      payment of 50% upon date you start work in Syracuse,  25% after 3 months,
      and the final payment after 6 months.

3.    MANAGEMENT  PERFORMANCE INCENTIVE PROGRAM (BONUS). 45% of base at 100% of
      Plan and increasing to 90% incrementally by exceeding the plan.

4.    RELOCATION  PLAN. At your option,  not to exceed three and one-half years
      for eligibility for Enhanced Executive Relocation Plan, "grossed up."

5.    MISCELLANEOUS EXPENSES. In lieu of company car, Perm Traffic will provide
      $15,000 "grossed up" to you after 60 days of employment. Company will pay
      for  temporary  housing  not to exceed  $2,500  per month and  reasonable
      travel home expenses for up to nine months.

6.    BENEFITS.  Medical, Dental, Vision, and Prescription coverage:  effective
      on date of hire.

      Term Life (Co. Paid)*: After 31 days of continuous service, Company paid,
      1 1/2 times salary.



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      Supplemental Life*: After 31 days of continuous service. Employee paid 1X
      or 2X or 3X salary. (Max. $650,000).

      Short Term  Disability:  Effective  on date of hire.  Weeks 1 through 17,
      100% of salary. For weeks 18 through 26, NYS Statutory benefits.

      Long Term  Disability:  Effective on date of hire  following  120 days of
      disability, $5,000/mo max. (Company paid)

      The combined maximum for Basic and Supplemental Life is $650,000.

      The  flexible  spending  program  will be  available to you the first pay
      period of 2008.

7.    401(K)  PLAN.  Effective  after 6 months of  employment.  Subject  to the
      limits required by law and the Plan: a) may defer from 1 - 25% of salary,
      tax  deferred;  b)  Company  to match  50% of the  first  3% of  employee
      deferral  after 1 year of  employment.  You may  defer up to the  maximum
      dollar amount allowed by law each year.

      In  addition,  once you have  completed  6 months  of  service,  The Penn
      Traffic  Company  will make a  contribution  of 3 percent  of your  total
      compensation  to  your  401(k)  plan  each  year.  If you  choose  not to
      participate in the 401(k) plan, an account will be set up for you for the
      3 percent contribution.

8.    VACATION. You will be eligible for (four) 4 weeks paid vacation per year.

9.    PENN TRAFFIC HOLIDAYS: Per Company plan, currently six (6).

10.   5% Employee Discount

11.   SEVERANCE  PLAN.  Fifty-two (52) weeks of severance  according to Company
      policy.

12.   CHANGE OF CONTROL.  You will need to complete the  document  that will be
      provided to you upon your date of hire.  Your  signature  will need to be
      witnessed here.

13.   STOCK.  You will  participate  in the company  "Omnibus" plan and receive
      stock  commensurate  with  your  position  at the  time  when the plan is
      executed for the management team.

14.   ANNUAL PAY AND  PERFORMANCE  REVIEW.  Beginning  of each fiscal year with
      rest of management team.



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It is important to reiterate that this letter is an offer of employment, and in
no way should be construed  to be an  employment  contract  for definite  term.
Employment at The Penn Traffic  Company is at-will,  subject to  termination by
the Company or you at any time.

We look forward to you joining The Penn Traffic team. If you have any questions
regarding this offer letter or the position, please contact me directly.

Sincerely,


/s/ Christine McMahon
------------------------
Christine McMahon
Vice President, Human Resources & Labor Relations
The Penn Traffic Company


Tod Nestor:

To acknowledge and accept the terms of this letter, please sign one copy of
this letter and retain the second copy for your files. Please return to my
attention by Thursday May 3, 2007.

I, TOD A. NESTOR accept this offer on this 3rd day of May, 2007.



   /s/ Tod A. Nestor
------------------------
     Tod A. Nestor




cc:  Bob Panasuk