TRENTON, N.J. -- Wakefern Food Corp. began its courtroom battle here late last week with Big V Supermarkets by emphasizing its demand that the Florida, N.Y.-based retailer pay the Elizabeth, N.J.-based, member-owned cooperative a withdrawal fee of "at least" $200 million.
The trial in U.S. Bankruptcy Court will determine the terms under which Big V can withdraw from Wakefern. If Big V is able and willing to meet those terms, it is likely to pursue a new supply agreement with another distributor -- most likely C&S Wholesale Grocers, Brattleboro, Vt. -- while proceeding with its financial reorganization, observers said.
If it gets an adverse ruling, it could explore other supply options, including remaining a member of Wakefern, as it develops its reorganization plan.
Big V filed for Chapter 11 protection late last year and had originally hoped to complete its financial reorganization by June. But matters became complicated when Wakefern filed suit against C&S, charging the wholesaler with interfering with and undermining Big V's relationship with Wakefern -- prompting Big V to sue Wakefern to determine its rights and obligations as it terminates its contract.
After lawyers for both parties introduced their cases, the trial's first day featured the testimony and cross examination of James Toopes, Big V chairman, president and CEO. Toopes said Big V could get considerably better terms from a wholesaler other than Wakefern, a situation that would enable it to emerge from Chapter 11 in a stronger condition.
In cross examining Toopes, Wakefern's counsel said Big V was trying to blame its problems on the cooperative when a variety of poor business decisions had led the retailer to seek bankruptcy protection.