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Gordy’s parties ordered to mediation

» Neillsville store ownership is the issue » Fate of final 6 stores in chain decided later

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    Gordy's Market on Bay Street in downtown Chippewa Falls. Tuesday, November 14, 2017. View more photos at LeaderTelegramPhotos.com.

    Staff photo by Marisa Wojcik
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CHIPPEWA FALLS — Parties involved in the sale of the Gordy’s Market location in Neillsville have been ordered to pursue mediation to resolve a dispute. 

An attorney who is overseeing the sale of the chain hopes to keep documents that contain details of financial dealings between the family that owns the chain out of public view.

In an order filed Tuesday in Chippewa County Court, the parties are required to mediate the dispute “in good faith” related to the proposed sale of the assets owned by Gordy’s Neillsville Foods. If the parties cannot agree on a mediator, the court shall appoint one.

The order also stays a requirement to begin discovery, pending further order of the court. The stay includes subpoenas between parties and the court-appointed attorney.

Attorney Michael Polsky, who has been appointed as a receiver in the case to handle the sale of the stores and assets, filed a document asking Chippewa County Judge James Isaacson to place a temporary seal on documents pertaining to the sale of the Gordy’s Market store in Neillsville.

Gordon Schafer ran the Chippewa Falls-based company for several years, and he is represented by law firm Bakke Norman of Menomonie. His sons Jeff, Rick and Dave Schafer have worked with the company, with Jeff serving most recently as CEO. Dave Schafer was chief financial officer earlier this year before stepping down.

“The emergency motion contains sensitive information regarding the current dispute between Gordon Schafer and some of his children regarding the ownership of the real estate … including some of the parties’ efforts to resolve the dispute by way of settlement discussions,” Polsky wrote in a letter to the court this week. “In order to promote continued settlement discussion, the information contained in the emergency motion should be treated confidentially and not made publicly available.”

Polsky added: “These proceedings have garnered substantial press coverage and the substance of the emergency motion would likely be reported by the press if the emergency motion was not filed under seal.”

At an auction in September, Family Foods submitted the top bid for the Neillsville store, for $150,000 plus inventory. The sale has been held up because of confusion over ownership of the building and who has the rights to lease it.

An auction for the six remaining Gordy’s Market locations will be at 10 a.m. Nov. 29 at the Milwaukee Athletic Club.

The six stores to be sold at the auction are the Chippewa Falls downtown, Chippewa Falls at Lake Wissota, Barron, Cornell, Chetek and Ladysmith locations.

The auction results will then be finalized at a Dec. 11 hearing in Chippewa County Court. The merits of the sale of the Neillsville store will not be addressed at the Dec. 11 hearing.

The Schafer family had indicated last month that it was interested in retaining those six stores. James Sweet, an attorney who is representing Jeff and Rick Schafer and their newly created Schafer Properties II LLC, hasn’t returned calls for comment about whether the family will be submitting bids at the auction.

In a letter last week describing the auction process, Polsky said he will accept bids from “qualified bidders” through Nov. 27.

Bidders must place a money deposit in the amount of 5 percent of the purchase price, or $50,000, whichever is greater, to be included in the auction. That money must be wired to the receiver’s account to be held in escrow.

If a successful bidder fails to close on the sale of a store, the bidder’s earnest money will be forfeited to the receiver.

On Aug. 23, food distributor SpartanNash Co. filed a lawsuit, claiming that Gordy’s Market locations across western Wisconsin owe more than $86 million. In total, more than $120 million in claims have been filed against the grocery chain, with several filed each day.

The filing deadline for proof of claims for businesses is Nov. 30.

At the beginning of summer, the grocery chain had 26 stores. Several have closed, and most were sold at an auction in September.

Contact: 715-723-0303, chris.vetter@ecpc.com

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