Assoc. Grocers bankruptcy dismissed
A bankruptcy court judge has thrown out a bankruptcy protection case filed on behalf of Associated Grocers of Maine, while an attorney involved in the case says former employees are unlikely to receive lost severance and vacation pay.
U.S. Bankruptcy Court District of Maine Chief Judge Louis Kornreich yesterday dismissed the bankruptcy filing, saying the receiver, Aurora Management Partners Inc., appointed to dismantle the Gardiner-based coooperative does not have the authority to seek bankruptcy for it, according to the Kennebec Journal. Other civil cases against the grocers' cooperative can now proceed, including a lawsuit filed by The Bank of Maine, which sought receivership in April, as well as a suit filed by Associated Grocers against a retailer. An attorney for 52 member grocery stores of Associated Grocers said they will likely have better luck recouping lost funds through state court than bankruptcy. The grocers had $1.5 million in deposits with AG, and owe $800,000 in accounts receivable.
Meanwhile, Fred Bopp, an attorney for the receiver, told the paper that liquidation of Associated Grocers will likely only pay secured creditors, and that the more than 100 former employees will probably not see the $100,000 owed to them for severance and unused vacation time. In addition, former workers covered by Teamsters Local 340 will likely not receive the $5.3 million in the New England Teamsters & Trucking Industry Pension Fund.
Associated Grocers, which supplied goods to 300 independent grocery stores around the state, reported $6 million in assets and $23.5 million in liabilities, including $6.7 million owed to secured creditors.
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