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Albertsons sues Haggen over lack of payment

Chain bought 146 stores, but never paid for 38 of them, lawsuit claims

FILE PHOTO - Haggen took over more than 100 stores across the country this year, but Albertsons says it still owes millions and is refusing to pay.When Haggen took over Albertsons stores across the state earlier this year, they said that the transition would be easy and hassle free for customers.

Albertsons stores closed their doors one day, and Haggen opened them again the next without problem, including stores in Tigard, Sherwood and Beaverton.

But new court documents reveal that behind the scenes, the transition has been anything but smooth.

Last week, grocery giant Albertsons filed a $41 million lawsuit against Haggen, claiming the Northwest grocer has failed to pay for several stores it purchased from the company over the course of the year.

In 2014, Albertsons and Safeway were forced to sell off several stores as part of a merger agreement. Haggen, a Washington-based grocer with a store in Tualatin, agreed to purchase 146 stores across the country, including those aforementioned stores in Tigard, Sherwood and Beaverton.

Albertsons said the two companies closed a deal for the final stores on June 9. Ten days later, Haggen sent Albertsons a letter, giving notice that it was refusing to pay for the final 38 stores due to “a few issues that Haggen alleged occurred throughout the 146 store acquisition process.”

The company owes more than $36 million for the sale of those 38 stores, Albertsons claims, as well as an additional $4.9 million in inventory at six additional stores.

The lawsuit doesn’t go into specifics about what the issues were, but Albertsons said that at no time during its dealing with Haggen did the store bring up any problems or issues.

Albertsons said that Haggen bided its time until the deals were closed before bringing any issues to the table.

“The acts engaged in by Haggen ... constitute fraud, including fraud by intentional misrepresentation, false promise and concealment,” the lawsuit claims.

The lawsuit was filed in Los Angeles Superior Court on Friday and was first uncovered by the Los Angeles Times.

The lawsuit comes amid a difficult time for Haggen, which laid off staff and cut employee hours at stores in Los Angeles and other Southwest markets last week as it struggled to gain a foothold in the competitive market.

Haggen has issued a statement, saying that it notified Albertsons in June that Albertsons had violated purchase agreements, but did not disclose what those violations were.

“Haggen ... had hoped that the parties could amicably address these issues. It is unfortunate Albertsons has chosen to file what appears to be nothing more than a strike suit to avoid addressing its wrongful conduct,” Haggen said in a statement to the media. “Haggen will mount a vigorous defense and aggressively prosecute its counterclaims, and will continue to operate its business in the best interests of all of its constituents, including its customers and employees.”


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