Following is the sequence of events that led to last week's Chapter 11 filing by Megafoods Stores, Mesa, Ariz.
xecutives decide to stick with Fleming, which has supplied the chain since it was founded in 1987. The two parties sign a five-year supply agreement.
Aug. 1: Megafoods' alleged failure to meet certain contract conditions prevents the contract from becoming effective.
Aug. 9: The new supply agreement between the two companies expires. Fleming puts Megafoods on a cash-on-delivery basis.
Aug. 11: Fleming officials say they believe they have resolved their differences with Megafoods over contract terms and expect Megafoods to pay certain funds by the next morning.
Aug. 12: When Megafoods does not pay those funds, Fleming halts deliveries for one day to the chain's 36 stores in Arizona, California and Nevada. Aug. 13: With the disagreement between them unresolved and headed for court, Megafoods signs a six-month interim supply agreement with Fleming. Aug. 15: Fleming officials say Megafoods goes into default on its supply agreement in Texas.
Aug. 16: Fleming announces it will take a third-quarter writeoff of $6.5 million to cover losses caused by Megafoods, including $2.5 million owed to Fleming by Megafoods' Western stores and $4 million owed by its Texas stores.
Aug. 17: Megafoods files Chapter 11. When Megafoods does not deliver funds required by the interim supply agreement, Fleming discontinues service to all 71 Megafoods stores. Aug. 18: Fleming attempts to get a court order to secure future payments and expects to resume shipments once that order is in place.