Haggen
Paul Wellman (file)

Haggen filed three motions Monday in bankruptcy court asking approval to sell 36 stores in California and Nevada to Gelson’s Markets and Smart & Final and to “establish procedures for ongoing sales,” according to a Haggen press release.

Essentially, the motions propose universal bidding procedures, stalking horse bid procedures — a process by which a bankrupt company selects an initial bidder to set the bar for future bids, thereby protecting itself from low bids — and a schedule of when stores will be sold.

Both Gelson’s Markets and Smart & Final have applied to be stalking horse bidders in Haggen’s Southwest market: Gelson’s Markets, a small southern California grocery chain, has signed an asset purchase agreement for 8 stores in California, and Smart & Final, a warehouse-style grocery chain, has done the same for 27 stores in California and one in Nevada — including two of Santa Barbara County’s five Haggen locations on Linden Avenue in Carpinteria and upper State Street in Santa Barbara. If the court approves Haggen’s sale to Smart & Final, the new locations will join two Smart & Final stores on S. Broadway in Santa Maria and E. Gutierrez Street in Santa Barbara.

Haggen asked for a court hearing in two weeks to review global bidding procedures and for companies interested in bidding on the remaining stores to express interest by October 26 before the auction slated for November 9.

Haggen is still awaiting court permission to close 100 stores in California, Arizona, and Nevada — not including the 27 already approved to close — and to begin going out of business sales so stores could close by the end of November, the press release said.

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