The much-troubled Washington State grocery chain, Haggen, announced Tuesday that it has voluntary filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court in Delaware. The action comes just a week after Haggen sued Albertsons for $1 billion, alleging that Albertsons’s bad-faith business practices led to Haggen’s failure to thrive after purchasing 146 Albertsons and Safeway stores earlier this year.
In a press release, Haggen said it had already received $215 million in debtor-in-possession financing, which will allow existing Haggen locations to operate as the company prepares to sell more stores in addition to the 26 sold in August.
In a prepared statement, Haggen CEO John Clougher said the carefully considered action “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.”
Currently Haggen faces four lawsuits — two filed on behalf of Santa Barbara County Haggen employees who lost their jobs during the acquisition — one filed by UFCW Local 770, the United Food and Commercial Workers Union of Los Angeles, and a $41 billion lawsuit from Albertsons.
[Update, 12:11 p.m.]:
Haggen spokesperson Deborah Pleva told The Oregonian that Haggen Pacific Southwest CEO Bill Shaner, who was hired to lead the company’s Southern California, Nevada, and Arizona expansion, is no longer with the company. Pleva said John Clougher, Haggen CEO Pacific Northwest, will carry the company forward.
[Update, 5:00 p.m.]:
According to Haggen’s petition for Chapter 11 bankruptcy, the company owes over $55 million to its 30 largest creditors, including Pepsi-Cola, Coca Cola, Starbucks Corporation, and Frito Lay Incorporated. The most significant debt — $14,874,746 — is to Unified Grocers Corporate, the largest wholesale grocery distributor in the western U.S., located in Commerce, California.