The much-troubled Washington State grocery chain, Haggen, announced Tuesday that it has voluntary filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court in Delaware.
Advertisement
Haggen has received up to $215 million in commitments from existing lenders, which will allow it to continue the flow of merchandise to its stores during bankruptcy proceedings, Haggen said in Tuesday’s statement.
Early 2015: Haggen sets an ambitious goal of converting stores under its banner within a 15-week period.
After lackluster grand re-openings that failed to win over customers, who complained Haggen charged higher prices than the stores it replaced, Haggen, after laying off and cutting employees’ hours, announced it would be closing almost 30 of its stores.
“It will be very hard to salvage this”, Livingston said. “You couldn’t do worse than what they’re doing”.
Haggen bought 146 Albertsons locations previous year, hoping to grow into a superregional chain.
That announcement was followed by Haggen and Albertsons suing each other over behavior related to the merger, with the two sides trading accusations of unpaid debt and sabotage.
The supermarket chain’s largest creditor, Unified Grocer, is owed an estimated $14.8 million, according to court documents. According to that lawsuit, Albertsons says that Haggen refused to pay for $36 million of inventory at 32 stores it acquired.
Starbucks didn’t immediately respond to a request for comment.
The filing also shows that Haggen owes its own former chief executive Dale Henley nearly $4.9 million in deferred compensation. Albertsons has dismissed the claims.
“The action we are taking today will allow us to continue to serve our customers and communities while providing Haggen with a process to re-align our operations to be positioned for the future”, John Clougher, Haggen’s CEO, said in a statement.
Haggen has enlisted Sagent Advisors, an independent investment banking firm headquartered in New York, to sell off its stores.
“Discussions are under way with interested parties to sell numerous company’s remaining assets”, Haggen noted in a press release.
Haggen Southwest CEO Bill Shaner is no longer with the company, a company representative told The Desert Sun on Wednesday.
Wes Herman of The Woods Coffee said he was taken by surprised by the news, given all the expansion activity Haggen was undergoing.
The stores in Bend were not selected in August to close. “With no template to go by, there is simply no guideline on how to scale an organization from 18 to 164 stores” within a two-to-three-month period, he said. The deal, struck in December, closed in late January.
Advertisement
The Bellingham Herald and Los Angeles Times contributed to this report. In Chapter 11, in most instances, the company remains in control of its business operations as “a debtor in possession” and is subject to the oversight and jurisdiction of the court.
