Lucky’s landlord, contractor cry foul

NIWOT — A Kentucky landlord and a Florida construction contractor are the latest parties to raise objections in Lucky’s Market’s ongoing bankruptcy procedures.

ATA Forum Louisville KY LLC, owner of a roughly 30,000-square-foot store at 300 Hurstbourne Parkway in Louisville that was formerly home to a Lucky’s Market location, claims the Niwot-based Lucky’s violated terms of its lease by improperly removing furniture and fixtures worth about $1.8 million.

“Under the Louisville lease, landlord funded a $1,203,800 ($40/square foot) allowance for the tenant improvements and $563,200 in landlord work, including the purchase and installation of walk-in refrigerators, freezers, built-in check-out stations, built-in deli cabinets/displays, plumbing fixtures, and copper piping and other connectivity infrastructure,” according to an ATA Forum filing made in U.S. Bankruptcy Court in Delaware. “Effectively, landlord paid for the entire build-out of the Louisville premises.” 

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Rather than allowing the landlord to recover that property, court documents allege that Lucky’s representatives “surreptitiously ‘gutted’ the Louisville premises in direct violation of the parties’ agreement and the store closing procedures.”

Meanwhile, general contractor Snyder Construction Inc., which was hired to build new Lucky’s stores in Fort Myers, Brandon and Clearwater, Florida, has filed for a lien on Lucky’s property, alleging Lucky’s is withholding payment on bills for labor and materials. 

The filing claims Lucky’s owes Snyder $313,017 for the Brandon project, $901,761 for Clearwater and $87,698.48 for Fort Myers. 

Lucky’s representatives did not respond to requests for comment Monday. 

Last week’s objections come on the heels of similar filings this month from a group of Lucky’s Markets landlords, creditors and a competing grocery-store chain. 

Landlord Blackfox Parkway Associates LLC is seeking to block Lucky’s from eschewing its lease obligations and wants to prohibit Lucky’s from removing furniture, fixtures and equipment from the store at 700 Ken Pratt Blvd. in Longmont.

Other previous objectors include United Natural Foods Inc., Harvest Meat Co. Inc., Benderson Development Co. LLC and  Dave’s Supermarket Inc.

The issue at the center of many of these complaints is Lucky’s plan to employ stalking-horse bidding procedures in an effort to offload underperforming stores to grocery chains such as Aldi and Publix. 

The stalking horse serves as a sort of backstop to ensure that excessively low bids are not submitted. If other bids are received, an auction will be held March 11 in Delaware. 

Lucky’s, which filed for Chapter 11 bankruptcy protection in January, has entered into agreements to sell store locations to:

• Publix, $11.5 million for five stores in Florida.
• Aldi, $7.8 million for six stores in Florida.
• Southeastern Grocers Inc. (Winn-Dixie), $2.8 million for five stores in Florida.
• LM Acquisition Co. LLC, an entity owned by Lucky’s founders Bo and Trish Sharon, roughly $3.2 million for locations in north Boulder; Fort Collins; Traverse City, Michigan; Cleveland and Columbus, Ohio; and Columbia, Missouri. 
• Seabra Foods XIV Inc., $1.25 million for the Hunters Creek, Florida, (Orlando) store.