Haggen has asked for court approval to hire a company for at least $1.25 million to explore selling the grocery chain or most of its assets.
In a bankruptcy court filing on Wednesday, Sept. 16, Haggen requested the court approve an agreement with Sagent Advisors. The investment firm would “provide investment banking services to Haggen with respect to a potential sale of Haggen or substantially all of its assets,” according to court documents.
According to the request, the advisory fee would either be $1.25 million or $30,000 per store included in the sale, or a percentage of the sale, whichever is greater. Also included is a fee of $50,000 a month. Haggen said it needed to retain Sagent in order to repay creditors.
The Bellingham-based grocer has had a difficult time after buying 146 Albertsons and Safeway in December. Haggen filed for Chapter 11 bankruptcy reorganization on Sept. 8. Earlier this summer it announced the closure of 27 stores and filed a $1 billion lawsuit against Albertsons, alleging Albertsons sabotaged the deal, something Albertsons denies. Albertsons is also suing Haggen for $41.1 million for unpaid inventory.
In its original press release announcing the bankruptcy earlier this month, Haggen said it was working with Sagent to market for sale some locations in the five states it operates to explore market interest. Haggen officials didn’t comment for this story, but CEO John Clougher previously said the goal is to “re-align its operations to be positioned for the future.”
Sagent is an investment bank that is focused on providing strategic and financial advice on mergers, acquisitions and sales. It has completed around 200 transactions with a total value of more than $60 billion, according to court documents.
Along with consulting and advising on a possible sale, Sagent would help Haggen evaluate the business and financial performance of the grocer and assist in marketing.