Haggen now in bankruptcy, blames Albertsons again
NEW YORK — A week after suing Albertsons for $1 billion, west coast regional grocer Haggen has filed Chapter 11 and continues to cite Albertsons as the source of its difficulties.
Haggen said the bankruptcy filing was necessary in order to reorganize around its core profitable stores. The company said it has received commitments for up to $215 million in debtor-in-possession (DIP) financing from its existing lenders to maintain operations and the flow of merchandise to its stores while it sells some of its store locations. The company said it has engaged Sagent Advisors to market for sale an unspecified number of store locations in the five states it operates and to explore market interest for various store locations. Discussions are underway with interested parties to sell many of the company’s remaining assets, according to a Haggen statement.
“After careful consideration of all alternatives, the company concluded that a reorganization through the Chapter 11 process is the best way for Haggen to preserve value for all stakeholders,” said John Clougher, Haggen’s CEO. “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.”
The filing comes roughly a week after Haggen files suit against Albertsons relating to a deal which allowed it to grow from an 18 store regional grocer to 164 stores through the purchase of Albertson’s locations in December 2014. The associated conversion process of the stores made Albertsons cooperation and good faith implementation of the terms of the deal in the Asset Purchase Agreement essential, according to Haggen. That did not occur, as detailed in Haggen’s lawsuit, details of which are available here.