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A&P sues bidder of deal gone bad
A&P is suing a real estate company that submitted winning bids for two of its supermarkets in a bankruptcy auction for failing to disclose it made the offer on behalf of an unqualified buyer, among other improprieties.
2 Min Read
A&P is suing a real estate company that submitted winning bids for two of its supermarkets in a bankruptcy auction for failing to disclose it made the offer on behalf of an unqualified buyer, among other improprieties.
Bidder Lee & Associates also failed to submit proper documentation to acquire the stores, evidently after encountering resistance to its plans from a landlord and union representing store workers, according to evidence filed in the case Tuesday.
The improprieties forced A&P to sell the stores to a backup bidder, and conduct abrupt going-out-of-business sales at both locations as problems with Lee's bid revealed themselves. A&P is seeking at least $1.8 million in damages from Lee and its president, James Wacht.
During an auction of A&P stores held in October, New York-based Lee & Associates outbid Bogopa Services Corp. for the Food Basics store in North Bergen, N.J., and the Flatlands Avenue Pathmark store in Brooklyn, offering $6.8 million and $5 million, respectively, for the units. However, subsequent negotiations with unions representing workers at those stores determined that Lee had bid on behalf of Francisco Jin, who operates several stores in the New York metro area under the Golden Mango banner.
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Jin, A&P alleged, was not financially able to qualify as a store bidder, and was not identified by Lee & Associates when it made bids for him.
According to the suit, Jin wished to back out of plans to convert the North Bergen store to a Golden Mango location in light of objections by the landlord of the shopping center. Lee & Associates also wavered on the commitment to buy the Flatlands store, attempting at times to solicit another tenant when Jin became nervous about hiring union workers for the location.
A judge has approved the sale of the Flatlands store to Bogopa, which operates Food Bazaar stores and was the original high bidder. A&P has asked the judge to approve the North Bergen sale to Bogopa.
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