Haggen files for bankruptcy

Haggen announced late Tuesday that is has filed for bankruptcy.

The Bellingham-Wash.-based grocer said it filed voluntary petitions for reorganization under Chapter 11 to the U.S. Bankruptcy Court for the District of Delaware in Wilmington.

The company's motion with the court said it intends to continue its day-to-day operations for customers, employees, vendors and suppliers, and other business partners during the restructuring. Additionally, it is seeking court permission to continue employee wages and certain benefits and honor certain customer programs. The motions are expected to be addressed by the court in the coming days.

Haggen also has retained Sagent Advisors to sell some locations in the five states it operates and explore market interest for various store locations. Discussions are underway to sell many of the company's remaining assets.

To accomplish this, Haggen has received commitments for up to $215 million in debtor-in-possession financing from its existing lenders to maintain operations and the flow of merchandise to its stores during the sale process.

"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 realign our operations to be positioned for the future."

Along with the changes, Haggen announced that Bill Shaner, who was CEO of the Pacific Southwest region that included Nevada, California and Arizona, is no longer with the company.

"We greatly appreciate his contribution to the company. John Clougher will be leading the company going forward," according to Deborah Pleva, a spokeswoman for the company.

Pleva said they would have no future comment at this time.

Haggen grew from an 18 store regional grocer to 164 stores through the purchase of Albertsons locations in Nevada, California, Arizona, Oregon and Washington in December 2014. The conversion process of the stores made Albertsons' cooperation and good faith implementation of the terms of the deal in their purchase agreement essential.

According to a statement by Haggen "this did not occur, as set forth in the company's recently filed lawsuit against Albertsons, which details a number of Albertsons' actions, which ultimately led to Haggen's failure in its efforts to convert newly acquired stores and ultimately resulting in the Chapter 11 filing."

Last week, the chain filed a $1 billion lawsuit against Albertsons claiming the chain made "false representations to both Haggen and the FTC (Federal Trade Commission) about Albertsons' commitment to a seamless transformation of the stores into viable competitors under the Haggen banner." It also claimed Albertsons provided misleading information that caused Haggen to raise prices, deliberately overstocked perishable products at newly acquired stores, and that the company moved Haggen products into Albertsons stores.

Hali Bernstein Saylor is editor of the Boulder City Review. She can be reached at hsaylor@bouldercityreview.com or at 702-586-9523. Follow @HalisComment on Twitter.