Haggen has filed for Chapter 11 bankruptcy protection less than a year after the company acquired 146 stores when Albertsons acquired Safeway. More than half of those stores, 100, were outside of Haggen’s base in Oregon in Washington and spread the company into California, Arizona and Nevada. Giving Haggen 146 locations was a condition Albertson’s and Safeway were required to meet for the FTC to approve of the companies’ merger.
Officials from Haggen said the company is working with Sagent Advisors, a New York-based investment-banking firm to find buyers for some of the locations in the Southwest. “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 CEO John Clougher in a statement.
Haggen, which initially had 18 stores, said successful conversion of the 146 stores depended on Albertson’s working in good faith with Haggen, but Albertson’s uncooperatiion led to Haggen failing to convert the new stores. In late August, Haggen announced the company would close 27 stores by mid-October with plans to move forward with additional shuttering. Less than one week later, Haggen filed a $1 billion lawsuit against Albertsons alleging that the latter deliberately tried to eliminate Haggen as a formidable competitor.