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


FOR IMMEDIATE RELEASE                           CONTACT:  Susan Asquith
                                                          Travers Collins & Co.
                                                          716-842-2222


                    PENN TRAFFIC'S LENDERS AGREE TO LIMITED
                  WAIVER TO WORKING CAPITAL CREDIT FACILITIES

     COMPANY CURRENTLY EXPECTS TO ISSUE FY2006 10-K AROUND THE END OF JULY

         SYRACUSE,  NEW YORK - JULY 3, 2007 - The Penn  Traffic  Company  (Pink
Sheets:  PTFC.PK)  announced  today that its working  capital  credit  facility
lenders  have  agreed  to  waive  certain  provisions  of its  credit  facility
agreements and, as a result,  the parties agreed to extend the deadline for the
company to deliver  FY2006  audited  financials to July 10, 2007. As of July 2,
2007, the company completed its FY2006 audited financials and currently expects
to include them in a public filing with the Securities and Exchange  Commission
on Form 10-K for FY2006 around the end of July 2007.

         The waiver also provides for extending the  completion  period of Penn
Traffic's  FY2007audited  financials  to September  30, 2007,  and addresses an
error  calculating  the  cost  of  pharmaceutical  inventory  for  purposes  of
determining the borrowing base calculation.  Upon correction of the error, Penn
Traffic was in compliance with the borrowing base calculation  contained in the
credit agreement.

         "We have gained  considerable  ground in recent months in implementing
our strategic  plan to  reestablish  Penn Traffic as an industry  leader," said
Robert  Panasuk,  President  and CEO,  Penn  Traffic.  "We are pleased that our
creditors  continue  to work  cooperatively  with us as we focus on meeting the
terms of our credit  agreements  and building on the  financial  and  operating
progress achieved during the first half of calendar 2007."


FORWARD LOOKING STATEMENTS

         This press release contains forward-looking  statements, as defined in
the Private  Securities  Litigation Reform Act of 1995, as amended,  reflecting
management's  current  analysis  and  expectations,  based  on what  management
believes to be reasonable assumptions. These forward-looking statements include
statements  relating to our  anticipated  financial  performance  and  business
prospects.  Statements  proceeded by, followed by or that include words such as
"believe,"  "anticipate,"  "estimate,"  "expect,"  "could,"  and other  similar
expressions   are   to   be   considered   such   forward-looking   statements.
Forward-looking  statements may involve known and unknown risks,  uncertainties


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and other factors, which may cause the actual results to differ materially from
those projected,  stated or implied,  depending on such factors as: the ability
of the Company to improve its operating performance and effectuate its business
plans;  the  ability of the  Company to  operate  pursuant  to the terms of its
credit facilities and to comply with the terms of its lending  agreements or to
amend or modify  the  terms of such  agreements  as may be needed  from time to
time;  the ability of the Company to generate  cash; the ability of the Company
to attract  and  maintain  adequate  capital;  the  ability  of the  Company to
refinance;  increases in prevailing  interest rates; the ability of the Company
to obtain  trade  credit,  and  shipments  and terms with  vendors  and service
providers for current orders;  the ability of the Company to maintain contracts
that are  critical  to its  operations;  potential  adverse  developments  with
respect to the Company's  liquidity or results of operations;  general economic
and business  conditions;  competition,  including increased capital investment
and promotional activity by the Company's competitors;  availability,  location
and terms of sites for store development;  the successful implementation of the
Company's  capital  expenditure  program;  labor relations;  labor and employee
benefit  costs  including  increases  in health care and pension  costs and the
level of  contributions to the Company  sponsored  pension plans; the result of
the pursuit of strategic alternatives;  economic and competitive uncertainties;
the  ability of the  Company to pursue  strategic  alternatives;  economic  and
competitive uncertainties; changes in strategies; changes in generally accepted
accounting  principles;  adverse  changes in economic  and  political  climates
around the world, including terrorist activities and international hostilities;
and the outcome of pending,  or the commencement of any new, legal  proceedings
against,  or  governmental   investigations  of  the  Company,   including  the
previously announced SEC and U.S. Attorney's Office investigations. The Company
cautions  that the  foregoing  list of  important  factors  is not  exhaustive.
Accordingly,  there can be no  assurance  that the  Company  will  meet  future
results,   performance   or   achievements   expressed   or   implied  by  such
forward-looking  statements.  This paragraph is included to provide safe harbor
for forward-looking statements, which are not generally required to be publicly
revised  as  circumstances  change,  and which the  Company  does not intend to
update.

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         The Penn Traffic Company  operates 106  supermarkets in  Pennsylvania,
upstate New York,  Vermont and New  Hampshire  under the BiLo,  P&C and Quality
trade names. Penn Traffic also operates a wholesale food distribution  business
serving   approximately  120  independent   operators  and  Penny  Curtiss,   a
Syracuse-based commercial bakery.


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