Stricken supermarket chain Haggen is attempting to sell $12.16 million in assets back to Albertsons and Safeway.
A proposed sale filed as part of Haggen's bankruptcy proceedings in the U.S. District Court of Delaware on Wednesday would hand over $3.57 million of the chain's inventory as well as $8.9 million in “records and goodwill." That includes prescription records, customer records, lists and medical profiles, as well as all other written or recorded information relating to pharmacies' operations.
This comes after a string of other major challenges for Haggen, which was recently slapped with a $41 million suit from Albertsons. Haggen later filed a $1 billion suit against the Albertsons, alleging the larger chain sabotaged the transition of stores.
Haggen acquired 146 stores from Albertsons and Safeway in December, taking the Bellingham chain from 18 to 164 stores nearly overnight.
After converting those stores in June, Haggen announced struggles with unions and the transition on Aug. 14, and with that, plans to close 27 of those stores due to underperformance over the following 60 days. It remains to be seen whether those stores will be sold.
Haggen also plans to close even more stores than the 27 already announced, a spokeswoman for the company said Friday. The spokeswoman didn't say which stores are slated for closure.
The transfer would involved assets from 13 Haggen stores to nearby competing stores under new Albertsons-Safeway banner, created through the two companies' merger in January.
The transfer deal could still fall through. Although Albertsons' LLC vice president Bradley Beckstrom has signed the agreement filed in court, as has Haggen CFO Blake Barnett, the agreement itself states the transfer date is yet to be determined, and if the parties do not agree on transfer dates by Oct. 15, the deal will automatically terminate.
Stroock & Stroock & Lavan’s Frank Merola, one of the attorneys that submitted the motion to authorize the asset sale purchase agreement, declined to comment on the agreement.
Even if the two companies do agree to the sale, its ultimate fate may lie in federal regulators’ hands.
Haggen’s ownership of these assets originally grew out of a divestiture the U.S. Federal Trade Commission (FTC) mandate, as a condition of the Safeway and Albertsons merger, which became final in January after the 146 store sale to Haggen in December.
According to the FTC complaint, the merger absent the divestiture would have lessened market competition since Albertsons and Safeway “compete vigorously” on the basis of price quality, product variety and services. The FTC chairwoman Edith Ramirez said at the time of the divestiture that “Absent a remedy, this acquisition would likely lead to higher prices and lower quality for supermarket shoppers in 130 communities.”
Referring to the divestiture to Haggen, she said, “This settlement will ensure that consumers in those communities continue to benefit from competition among their local supermarkets.”
The stores locations listed in the agreement are undoubtedly stores that Haggen acquired form the divestiture, since all of these stores are located outside of Washington state, and Haggen’s 18-store reach before the deal only existed within the confines of the Evergreen State.
The locations are in Arizona, Oregon and California, says the proposed sale order filed in court Wednesday.
FTC officials did not respond to request for comment.
As for the asset transfer agreement, Safeway and Albertsons would purchase the assets from each location for stores it owns in close proximity.
For example, for Haggen store 2114 in Klamath Falls, Oregon at 211 North Eighth St., Albertsons store 577 on 5500 South Sixth St. in Klamath Falls would attain the assets.