CHIPPEWA FALLS — The Gordy’s Market Inc. grocery store in Ladysmith has officially been sold.
Chippewa County Judge James Isaacson approved the sale of the store during a short court proceeding Wednesday morning. Isaacson said the sale allows the store to maintain operations without interruption.
“These groceries have a short shelf life,” Isaacson said. “The employees need to keep getting paychecks. This is best for all involved.”
Receiver Michael Polsky — a Milwaukee-based attorney appointed to oversee dissolving the grocery chain and selling off its assets in the wake of a $46.2 million lawsuit filed by a food distributor — reached the agreement earlier this month to sell off the assets of the Ladysmith store, located at 400 W. 9th Street.
Polsky wrote in a court document that GMI had already “engaged in extensive negotiations with Great Lakes Foods LLC regarding a purchase agreement for the sale of the Ladysmith assets.”
Polsky met with Great Lakes Foods and its affiliate, Ladysmith Food & Beverage, and reached an agreement to sell the business for $27,000 plus the value of the inventory.
As part of the agreement, the new owners will hire “substantially all” of the employees.
Five other Gordy’s Market Inc. grocery stores will be auctioned off March 6: Chippewa Falls downtown, Chippewa Falls on Lake Wissota, Barron, Cornell and Chetek. The Eau Claire store on Clairemont Avenue, which closed and later re-opened, is not included in this lawsuit, as Gordy’s Market does not obtain its groceries for that store from food distributor Nash Finch.
This was the final hearing before the auction, and Gordy’s Market did not file any last-minute motions in an attempt to stop the auction from occurring.
Lauren Stanley, an attorney in Polsky’s office, attended the court proceedings Wednesday, and she confirmed the auction will take place as scheduled at the law offices of Godrey & Kahn in Milwaukee on March 6. Isaacson will then review and likely approve those auction results at a hearing in Chippewa County on March 8.
Polsky “filed a motion to sell substantially all of the assets of Gordy’s Market Inc., free and clear of all liens,” a court document reads. “The receiver will accept qualified bids from qualified bidders for certain GMI assets.”
To become a qualified bidder at the auction, a company must include an earnest money deposit of $100,000, which Polsky will place in an escrow in a non-interest bearing account. Qualified bidders must submit their deposit by March 1 to be eligible to participate in the auction. Companies wishing to bid on the five stores should have an appointed agent attend the auction. Bids for portions of a lot will not be considered.
The auction will be done in rounds, with each company having 15 minutes to submit a bid, the court document states.
Polsky has set a deadline of April 24 for any creditors of Gordy’s Market to enter claims with the court if they see to participate in any dividends.
In the Nash Finch lawsuit, the food distributor claims that Gordy’s Market owes a total of $46.2 million — $43.2 million in a rebate-able incentive, a $1 million note, and $1.9 million in accounts receivable. The company contends that Gordy’s Market “has no excess cash to get caught up on its delinquent balance,” and the grocery chain is on the verge of insolvency.