SpartanNash Files Suit Against Gordy’s Markets
SpartanNash has filed a lawsuit against Wisconsin-based independent grocer Gordy’s Markets Inc. (GMI), asking for $46.2 million for unpaid loans. The total comes from $43,325,002 in a “rebate-able incentive,” $1 million in a principal note that SpartanNash loaned to GMI in November 2017 and $1,913,149 for accounts receivable, according to local news reports.
In an affidavit filed on Dec. 28, 2018 by Bill Jacobs, VP of treasury and corporate development at Grand Rapids, Mich.-based SpartanNash, explained that GMI is in default under the terms of a “customer supply agreement” from November 2017.
“GMI is unable to pay plaintiff timely since late August 2018,” Jacobs wrote. “GMI’s delinquent balance with plaintiff has grown considerably in the last few weeks.” The document added that a review of GMI’s finances indicate that the company “has no excess cash to get caught up on its delinquent balance.”
According to the lawsuit, GMI had agreed to pay the principal sum of $1 million plus interest and used as collateral “equipment, fixtures, inventory, investment property,” including liquor, wine and beer licenses. The lawsuit alleges that GMI has defaulted on the previous agreement, which led the food distributor to accelerate the maturity of the note with all amounts due as of Dec. 27, 2018.
The lawsuit affects six of the Gordy’s Markets that GMI retained during a bankruptcy sale last year, but doesn’t involve a seventh Gordy’s Market that opened this summer. GMI has 20 days to respond to the lawsuit.
According to local news reports, all seven Gordy’s Market remain open for business.