Washington-based Haggen, the West Coast regional grocer, announced late Sept. 8 that it filed for Chapter 11 bankruptcy in an effort to reorganize.
The company received $215 million in debtor-in-possession financing from its lenders to maintain its existing operations, according to a news release.
“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,” Haggen CEO John Clougher said in a statement. “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 announcement came after Haggen filed a $1 billion lawsuit against Idaho-based Albertsons, alleging that Albertsons hamstrung Haggen’s expansion by using confidential scheduling information to sabotage grand openings, misleading the company with inflated retail pricing data, cutting off Haggen’s advertising, understocking high-demand inventory and overstocking perishable goods, diverting inventory to Albertsons stores, and failing to perform maintenance on the stores and equipment.
Haggen recently took over 146 Albertsons and Safeway stores in California, Nevada and Arizona, 20 of which are in the Tri-Counties. It was part of an antitrust deal between Albertsons and Safeway and the FTC that allowed the company’s $9.2 billion merger.
Haggen is closing four tri-county stores.