Wednesday, February 21, 2018

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Deal for 4 Gordy's stores falls through

Ill.-based company was top bidder for 2 locations in Eau Claire and 1 each in Hayward and Chippewa Falls

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    Closed Gordy's grocery store in the Shopko Plaza

    Staff Photo by Steve Kinderman
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    Hoffman

    Dan Reiland

CHIPPEWA FALLS — Hilco Global has backed out of its deal to buy four former Gordy’s Market locations, court records show.

At an auction in September, the Illinois-based financial services holding company had the top bid to buy the Hamilton Avenue and Clairemont Avenue (Shopko Plaza) stores in Eau Claire, the Hayward store and the Chippewa Falls Commons (south side) store for $210,000.

New Chippewa County Court records show Hilco Global has dropped its interest in acquiring those stores and the auction bid is considered “null and void.”

Court records did not indicate the status of the former Gordy’s store in Rice Lake, which Hilco bought for $50,000.

At recent court hearings, Hilco Global attorneys had argued over whether certain assets and fixtures inside those buildings were included in the purchase price. The company wanted to remove and sell those fixtures, then sell the buildings to new developers. Hilco officials have not responded to calls for comment in the months since they were the top bidder for those buildings.

Judge James Isaacson also recently signed an agreement that states food distributor Nash Finch and Settlers Bank have abandoned all interest in six of the closed stores: Hayward, Chippewa Falls Commons, Eau Claire Clairemont, Rice Lake, Stanley and Richland Center. The Stanley and Richland Center locations didn’t receive any bids at the auction in September.

With those firms now abandoning their claims on those locations, it is unclear if anyone is actively marketing those buildings to be refilled with a new client.

Chippewa Falls Mayor Greg Hoffman was disappointed Global isn’t acquiring the stores.

“Initially, I was excited,” Hoffman said. “I checked into Hilco, and they looked like a good firm. But I heard three weeks ago someone else was looking into it.”

Hoffman said the city has already gone through this process with the nearby Kmart building sitting empty for a few years before it was recently turned into a U-Haul facility. He hopes the Gordy’s Market building doesn’t sit empty for too long.

“It would be nice to have a grocery store on the south side, for convenience,” he said.

Schafer Properties — the new company that was formed and is now operating six Gordy’s Market stores, has objected to the court order on abandoning interest in the six locations, contending it retains ownership of the Hayward property.

Also objecting to the court order is Fong Family, which is the owner of the Eau Claire store at 3310 E. Hamilton Ave. The attorney for Fong Family states the company is still seeking past due rents from Gordy’s Market.

A mediation date has been set for Tuesday between Schafer Properties, Nash Finch and attorney Michael Polsky, who was appointed to handle dissolving Gordy’s Market’s 26 stores and assets as those parties try to finalize a deal for the store in Neillsville. Polsky wrote a letter to Isaacson saying the parties also will discuss the Schafer Properties’ claim on the Hayward location at that meeting.

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

On Aug. 23, food distributor Nash Finch Company filed a lawsuit, claiming that Gordy’s Market locations across western Wisconsin owe more than $86 million. In November, Nash Finch bought six Gordy’s Market locations in an auction — Chippewa Falls downtown, Chippewa Falls on Lake Wissota, Cornell, Ladysmith, Barron and Chetek — and then agreed to assign its interest in the purchase to Gordy’s Market Inc. This agreement allowed the Schafers to retain ownership of the six stores and keep 340 employees on the payroll.

As of Dec. 7, a total of 1,400 separate creditors filed proof of claims against Gordy’s Market totaling $50,753,461. This is in addition to the claim of $86 million claim filed by Nash Finch Company and a $5 million claim filed by Settlers Bank.

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


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