Auction set for Wisconsin grocery chain
Eau Claire Leader-Telegram
Chippewa FALLS, Wis. — Gordy’s Market stores and assets are slated to be auctioned off later this month.
Milwaukee attorney Michael S. Polsky, who was appointed as receiver Aug. 23 over the future of the grocery store chain, filed documents in Chippewa County Court that state the auction will be held at 10 a.m. Sept. 25 at the Milwaukee Athletic Club.
Companies interested in buying one of the stores must submit a qualified bid by Sept. 14. A hearing for the proposed sale of assets is then scheduled for Sept. 28, after the auction concludes.
To participate in the auction, a company must make a qualified bid, which means providing a money deposit that is acceptable to Polsky, or provide a certified check payable to him. Companies that don’t make a qualified bid will not be allowed to participate in the auction.
Polsky wrote that he, along with Silverman Consulting and Food Partners, “have worked together and have continued to contact potential purchasers in order to market certain assets of the Gordy’s (chain) in a commercially responsible manner and maximize the value of the assets for the benefit of the Gordy’s (chain.)”
In a lawsuit filed Aug. 23, food distributor Nash Finch Co. stated the grocery store chain owes the company $86 million and requested a receiver be appointed to oversee the stores. The debt is broken down into $36.3 million in an incentive, $7.8 million in accounts receivable, and $42.6 million in liquidated damages, for a total of $86,811,271, through July 18 of this year. Those calculations do not include attorney’s fees, costs or interest.
In the new court documents, Polsky added that Gordy’s Market owes Settlers Banks a total of $4.9 million.
Gordy’s Market had 26 locations but has since closed six, including one in Eau Claire and one in Chippewa Falls. The chain also agreed to sell two Eau Claire stores and another in Tomah to Onalaska-based Festival Foods. In the new court documents, Polsky wrote that a motion hearing will be Sept. 15 referencing the sale of those three stores to Festival Foods, as the sale needs his approval.
Last week, letters were sent out to 1,008 Gordy’s Market employees notifying them that if new owners are not found, the stores would close and they would be permanently laid off. That letter was later released by the state Department of Workforce Development.
Polsky didn’t return calls and an email seeking comment Tuesday.
William Jacobs, the vice president of treasury and corporate development for Michigan-based SpartanNash Co., recently submitted an affidavit to the court that details the need for Polsky to be a receiver.
“The liabilities of Gordy’s parent and each of the other Gordy’s entities exceed its assets,” Jacobs wrote. “Based on all of the foregoing, each of the Gordy’s entities is insolvent or in imminent danger of insolvency.”
The debtors — Gordy’s Market — are not allowed to transfer or dispose of any assets without Polsky’s prior written consent.