Selling your business, or buying another, can be a major event for you, your professional future and the future of your business. You may have spent weeks, if not months, finding the right buyer or seller, then came the process of reaching an agreement on the price and terms of the sale. After the parties signed on the dotted lines you celebrated. All that work finally paid off! Maybe not.
As two supermarket giants are finding out, the fact a sales/purchase agreement was reached hasn’t resulted in the ‘happily ever after’ both parties hoped for. In fact, one is suing the other for breach of contract, according to the Los Angeles Times.
Supermarket giant Albertsons is suing Haggen, claiming it engaged in fraud due to its failure to pay more than $41 million as part of an agreement to sell 146 grocery stores. Haggen, based in Bellingham, Washingtom, bought Albertsons, Vons, Pavilions and Safeway stores from Albertsons and Safeway.
They sold them because the Federal Trade Commission (FTC) required the sale as a condition of the agency’s approval of a merger between Albertsons and Safeway. The stores include 83 in the state, mostly the southern California, eleven of them in Orange County, according to the Orange County Register.
Albertson’s complaint alleges Haggen,
- Refused to pay for $41 million for inventory at 32 stores it acquired.
- Waited until deals closed on the sale of all 146 stores before informing Albertsons that it would not pay for the inventory.
- Provided “baseless” (though unspecified) reasons for its failure to pay and “Haggen’s acts were fraudulent in nature and done with malice and a willful disregard for Albertsons’ rights.”
Haggen’s side of the story, told in a statement released to the public, is that,
- It notified Albertsons in June that Albertsons violated the purchase agreement.
- There are possible violations concerning requirements spelled out by the FTC and various state attorneys general (the alleged violations weren’t disclosed).
- Albertsons is trying to avoid “addressing its wrongful conduct” by filing the lawsuit.
- It hopes the two can reach an agreement over the issue but if not, “Haggen will mount a vigorous defense and aggressively prosecute its counterclaims.”