SpartanNash Sues Gordy's Market For $46.2 Million
CHIPPEWA FALLS, WI - Beef between food distributor Nash Finch Co. and Gordy’s Market Inc (GMI) has been reopened, with the SpartanNash subsidiary once again suing the Wisconsin-based grocer for failing to pay off its loans. Nash Finch first filed an $86 million lawsuit against Gordy’s in August of 2017, and, this month, the distributor alleged that Gordy’s is again in default under the terms of a "customer supply agreement."
The Leader-Telegram reports that Gordy’s is toeing insolvency and, as a result, Nash Finch Co. is filing a lawsuit for $46,238,151—$43,325,002 for a “rebate-able incentive,” $1 million for a principal note that the food distributor loaned to Gordy’s in November 2017, and $1,913,149 for accounts receivable.
"GMI is unable to pay plaintiff timely since late August 2018," Nash Finch’s Vice President of Treasury and Corporate Development William Jacobs wrote in an affidavit that was submitted with the lawsuit. "GMI’s delinquent balance with plaintiff has grown considerably in the last few weeks."
The lawsuit outlines that GMI agreed to pay a sum of $1 million plus interest, with “equipment, fixtures, inventory, investment property,” and liquor, wine, and beer licenses used as collateral for six Gordy’s stores. However, the lawsuit states, “as a result of these defaults, Nash Finch accelerated the maturity of the note so that all amounts there under are immediately due and payable as of December 27, 2018.”
Jacobs also claimed that Gordy’s finances show that the grocer “has no excess cash to get caught up on its delinquent balance,” suggesting “it would be beneficial to plaintiff and other creditors of GMI to have a supervised process by which to market and sell defendant’s assets, resolve creditor claims, and make distribution to creditors.”
In response to the lawsuit, Gordy’s President Jeff Schafer stated, “I have no comment on the advice of my legal counsel. Our stores are still open for business. Our stores are full, and we’re getting all of our groceries."
According to the Leader-Telegram, Gordy’s has 20 days to respond to the lawsuit.
Which way will the court lean regarding this case? AndNowUKnow will continue to report on the latest.