Bankrupt Haggen grocery chain seeks to sell assets

Haggen has asked for court approval to hire a company for at least $1.25 million to explore selling the grocery chain or most of its assets.

In a bankruptcy court filing on Wednesday, Haggen requested the court approve an agreement with Sagent Advisors. The investment firm would “provide investment banking services to Haggen with respect to a potential sale of Haggen or substantially all of its assets,” according to court documents.

According to the request, the advisory fee would either be $1.25 million or $30,000 per store included in the sale, or a percentage of the sale, whichever is greater. Also included is a fee of $50,000 a month. Haggen said it needed to retain Sagent in order to repay creditors.

The Bellingham-based grocer has had a difficult time after buying 146 Albertsons and Safeway in December. Haggen filed for Chapter 11 bankruptcy reorganization on Sept. 8. Earlier this summer it announced the closure of 27 stores and filed a $1 billion lawsuit against Albertsons, alleging Albertsons sabotaged the deal, something Albertsons denies. Albertsons is also suing Haggen for $41.1 million for unpaid inventory.

In its original news release announcing the bankruptcy earlier this month, Haggen said it was working with Sagent to market for sale some locations in the five states it operates to explore market interest. Haggen officials didn’t comment for this story, but CEO John Clougher previously said the goal is to “re-align its operations to be positioned for the future.”

Sagent is an investment bank that is focused on providing strategic and financial advice on mergers, acquisitions and sales. It has completed around 200 transactions with a total value of more than $60 billion, according to court documents.

Along with consulting and advising on a possible sale, Sagent would help Haggen evaluate the business and financial performance of the grocer and assist in marketing.

Meanwhile, The Seattle Times reported this week that Haggen is working with Albertsons to take back some of its former employees, even amid the two chains’ back-and-forth lawsuits.

In a Thursday memo to employees, Haggen said the companies are “cooperating” in a request to waive the one-year ban preventing Albertsons from hiring workers from the 146 stores it sold to Haggen.

That ban, like the sale of the stores, was required by federal antitrust regulators as a condition for Albertsons’ $9.4 billion takeover of Safeway.

The order was meant to protect Haggen from poaching by a bigger rival. But now, with Haggen under Chapter 11 bankruptcy protection, the ban stands in the way of job security for thousands of grocery store employees.

“We recognize that these are challenging days,” Haggen says in the memo, which was seen by The Seattle Times. “We want you to know with certainty that Haggen is supportive of employees securing work elsewhere.”

Right now, only workers who have been laid off by Haggen are eligible for hire at Albertsons, according to UFCW locals in Southern California who successfully pressured Albertsons to give former workers preference for open jobs based and benefits based on their prior seniority with the company.

Haggen told staffers that getting a waiver from the FTC has been a “priority,” to “ensure our employees can take advantage of every opportunity available to them.”

In the document, Haggen says FTC staff is trying to get the modification approved on an “expedited basis.”

“We understand your frustation, but this is a process and we are only days into it,” the memo said.

Haggen also assured employees that it’s in active talks with many different potential buyers for “a significant number” of locations. “We hope to share more details as they become available, perhaps as soon as next week.”

The Seattle Times contributed to this report.

This story was originally published September 18, 2015 at 6:27 PM with the headline "Bankrupt Haggen grocery chain seeks to sell assets."