Virginia Grocer Files Suit Against Supervalu

RICHMOND, Va. - Johnny Johnson, operator of a chain of inner-city supermarkets here, has charged in a lawsuit that heavy-handed tactics and deception by grocery supplier Supervalu, Inc. have had an adverse effect on his business and health, according to the Richmond Times-Dispatch.

Johnson filed a personal-injury suit in Richmond Circuit Court last week, seeking $25.35 million in damages from Minneapolis-based Supervalu. According to celebrity lawyer Johnnie L. Cochran Jr., a key member of Johnson's legal team, "These are very, very serious personal injuries and damages." He added, however, "This all could be successfully worked out with us," referring to Supervalu.

The company, the country's biggest grocery wholesale distributor and an owner of several supermarket chains, has denied the charges of improper conduct or interference, adding that it's not to blame for the financial troubles of Marketplace Holdings, Inc. or Johnson's health problems.

The company supplies Johnson's three Community Pride stores as well as The Market at Tobacco Row, all in Richmond. Supervalu additionally has been a major financial backer of Marketplace Holdings, lending the company money to buy merchandise, remodel stores, and build the Tobacco Row grocery. According to Supervalu, Marketplace Holdings has built up "a significant debt."

Johnson concedes that his company owes money to Supervalu, but he won't say how much, and Cochran didn't know the amount. "It may be hundreds of thousands of dollars," the lawyer said.

The distributor said it can't continue to extend credit under the circumstances. It didn't deliver some merchandise two weeks ago because Marketplace Holdings was in default on its payment. Shipments have resumed and will continue as long as payment is made, Supervalu said. "We've worked hard to try to help Mr. Johnson with his business operations," Supervalu's statement said. "In fact, we have been more flexible than usual in our efforts to work this out."

Johnson's lawsuit claims that Supervalu has conducted questionable business practices that have led to a cash-flow problem at Marketplace Holdings and have resulted in his severe health problems, including high blood pressure, seven bleeding ulcers, shingles, and depression. The suit says the company's actions have tarnished his reputation, eroded his future earnings potential, and had an impact on his livelihood. The upshot, according to Johnson, is that he must sell the four stores soon or face closing them unless something can be arranged with Supervalu.

The suit additionally alleges that Supervalu:
- Charges "materially higher" unit costs for merchandise supplied to Johnson's stores compared with other area grocery stores that Supervalu supplies.

- Lets workers make racial slurs about Johnson.

- Collected manufacturer rebates on products that were not bought by Johnson's company, prompting an investigation by some manufacturers that has tarnished his company's image. Two manufacturers won't conduct business with Johnson as a result.

- Interfered with his plans to buy Camellia Food Stores, which runs 18 groceries in the Hampton Roads area. The deal fell through, according to Johnson, because Supervalu told Camellia's owners that Johnson didn't have the necessary financing. Supervalu also allegedly introduced Camellia to another prospective buyer.
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