HAGGEN FILES FOR BANKRUPTCY TO REORGANIZE AROUND FEWER STORES, PROFITABLE LOCATIONS

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East County News Service

September 14, 2015 (San Diego’s East County)—Haggen, a major West Coast regional grocer, has announced plans to reorganize around its core profitable stores by filing voluntary petitions for reorganization under Chapter 11 bankruptcy. The company 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 during the sale process.

The move comes after Haggen recently announced plans to close some, though not all, of its San Diego County stores, all former Vons, Albertson’s or Safeway locations.

The Company is seeking Court approval to continue employee wages and certain benefits and honor certain customer programs, according to Haggen. 

“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, Chief Executive Officer of Haggen. “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 Company has engaged Sagent Advisors to market for sale some 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.

Haggen grew from an 18 store regional grocer to 164 stores through the purchase of Albertson’s locations in December 2014.

Haggen has also filed a lawsuit against Albertson’s alleging that Albertson’s did not fulfill good faith implementation of the asset purchase agreement’s terms and faults Albertson for the failiure of some newly acquired stores. Albertson’s has denied violating the purchase agreement.