Chippewa County (WQOW) - A Chippewa County judge approved the sale of three Gordy's Market stores over the objections of two businesses who said the grocery chain owes them money.
On Friday in court, receiver Michael Polsky argued in favor of the sale of two Eau Claire Gordy's Market and one in Tomah to Festival Foods. The sale does not include gas stations at the stores. Festival Foods has agreed to pay $5.2 million for the two Eau Claire stores. Polsky said Gordy's and a financial consultant with Silverman Consulting, a management advisory firm based in Chicago, believed it's a fair price. They also believed the value of the stores will drop if not sold promptly.
However, Attorney Josh Christianson, a lawyer representing Northwest Wisconsin Refrigeration Services and Huiras Construction, said those businesses are owed a combined total of nearly $500,000. According to court documents, Gordy's owes Northwest Wisconsin Refrigeration Services $384,609.95 and $113,000 to Huiras Construction. Christianson argued against the sale because all of the proceeds will go to Gordy's main suppliers, Nash Finch and Settlers Bank.
"The sale itself calls for Nash Finch and Settlers Bank to be treated much more favorably than any other creditors, including, as far as I can see, all general unsecured creditors," Christianson said.
Polksy acknowledged the results will not be fair to everybody. "I acknowledge that in an insolvency proceeding, the results will not be fair for everybody," he said. "There are creditors that are not going to get paid in this case, and those creditors did work for Gordy's Market, provided goods and services to Gordy's Market and there isn't enough money to pay them in full. This is an insolvency proceeding."
In court, Scott Kohler, a financial consultant with Silverman Consulting, testified that Gordy's has assets of $40 million but debts totaling more than $70 million.
News 18 also checked court records on Friday and found that in the past week, 32 of Gordy's vendors, suppliers and a handful of employees have filed claims for money they said Gordy's owes them. Those claims total more than $1.2 million.
On Friday, News 18 also learned that 17 bids were received by Thursday's deadline to purchase some of Gordy's other 23 stores. However, News 18 does not know which of those bids are for which stores, and the outcome of those offers was not revealed. An auction of any remaining stores is set up for late September.