Bankruptcy judge OKs Lucky’s store sales procedure

NIWOT — A U.S. Bankruptcy Court judge in Delaware approved a series of motions this week that pave the way for Lucky’s Markets to move forward with its process of selling off shuttered store locations across the country. 

The decision by Judge John Dorsey came after a slew of objections were filed by creditors, landlords and competing grocery chains, many of which centered around 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, but critics argue these kinds of deals could give unfair protections to certain bidders while failing to maximize the value of Lucky’s assets. 

“The bid procedures … are reasonable, appropriate and represent the best method for maximizing value for the benefit of the debtors, their estates, and their creditors,” Dorsey’s order said. “The bid procedures were negotiated at arm’s length, in good faith, and without collusion. The bid procedures balance the debtors’ interests in emerging expeditiously from the Chapter 11 cases while preserving the opportunity to attract value-maximizing proposals beneficial to the debtors, their estates, their creditors, and other parties in interest.”

The court has set the auction for Lucky’s stores for March 26.

Lucky’s, representatives of which did not respond to requests for comment Thursday, 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.
• Hitchcock’s Markets, $275,000 for the St. Petersburg, Florida, store.

The court has set the auction for Lucky’s stores for March 26.

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