Grocer Haggen Files for Chapter 11 Bankruptcy

by San Antonio Attorney

Las Vegas-based grocery chain Haggen filed for Chapter 11 bankruptcy on Tuesday. It blames Albertsons for ultimately causing the company to declare bankruptcy.

The company said in a statement that creditors are going to lend around $215 million to keep Haggen’s operations during the sale process.

Haggen filed a $1 billion lawsuit a week ago claiming that Albertsons was trying to sabotage its new stores to go bankrupt.

The company was owned by a family until the recent recession. It has been doing business for 72 years but the downturn in the economy took a major hit on the company. A majority share of the grocery chain was sold to Comvest Group.

Comvest is a Florida-based company that was also an investor in Summerlin-based Allegiant Air. It helped raise over $90 million in stock before its share in the company was sold after 2007.

Comvest trimmed the number of Haggen’s stores from to 18 from 30 locations.

Haggen invested $300 million on the Safeway-Albertsons merger. The agreement increased the number of stores from 18 to 184 in different locations.

But Haggen’s $1 billion on September accused Albertsons for causing price increases and diminishing quality. The company also claimed that Albertsons created unnecessary job losses and brought serious financial damage on Haggen.

Haggen reported 27 store closings in last month, but no local stores were included in the closing locations.

On the other hand, Albertsons sued Haggen to collect $41 million of unpaid inventory.  Aside from this problem, Haggen is also facing lawsuits of workers for unlawful termination, and a union has submitted grievances for breaching contracts.

Bankruptcy is never good news, but a qualified and attentive Bankruptcy Lawyer San Antonio can help protect you and your business.

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