Gelson’s Market wants to purchase the grocery store located at the corner of Lincoln and Ocean Park Boulevard following the bankruptcy of current owner Haggen.

Haggen has filed paperwork with the courts to establish procedures for selling many of its former stores. Gelson’s has been identified as a potential buyer for the Santa Monica store, but the process allows for others to make offers on the business.

According to Haggen, the company has requested an Oct. 19 date for the court to rule on its proposal to auction assets outside its Pacific Northwest territory.

Haggen identified two “stalking horse” bidders for several Southern California stores. A stalking horse bid is a way for an auction seller to establish a minimum threshold for its assets. The seller handpicks from a pool of bidders in advance of the actual auction. Some incentives could be provided to the stalking-horse bidder but once a bidder is chosen, other potential bidders can submit competing offers in excess of the stalking-horse offer.

Potential bidders have until Oct. 26 to submit an indication of interest to participate, bids are due by November 2 with an auction scheduled for Nov. 9. If no bids are received for the stalking horse packages, or the stalking-horse bidders are the high bid for those assets, a sale hearing will be scheduled for Nov. 13. Otherwise, a hearing will be held to consider the results of the auction on Nov. 24.

“The sale process has been designed to be fair and transparent in order to derive the highest bid for the stores and to maximize value for the estate and creditors in an orderly process,” Haggen said in a statement. “The procedures will allow the sale auction(s) to be conducted in a controlled, fair and open fashion that will encourage participation of financially capable buyers.”

Gelson’s president & CEO, Rob McDougall, said the purchase offer was made to the Comvest Group, the investment company that owns a majority stake in Haggen.

“We’ve been told the process with the bankruptcy judge could take several weeks. We are excited at the prospect of significantly expanding our brand offerings to new communities,” McDougall said. “Should our bid prove successful, it will be a benefit for thousands of shoppers who value quality products and exceptional service. Furthermore, we will look forward to welcoming the Haggen store employees into the Gelson’s family, and foresee growth opportunities for our associates.”

The sale of the Santa Monica location was triggered by Haggen’s unsuccessful attempt to expand.

Haggen was a small grocery chain based out of Washington in 2014 that exploded almost overnight when it said it would purchase 146 stores that Safeway/Albertsons were forced to sell when the two giants merged. Haggen grew from 18 stores with 16 pharmacies to 164 stores with 106 pharmacies; and from 2,000 employees to more than 10,000 employees.

At the time of purchase, Haggen said it would rely on cooperation from the newly merged Safeway/Albertsons to facilitate the transition process. However, the two companies quickly began accusing each other of wrongdoing and multiple lawsuits were filed.

Haggen filed for bankruptcy on Sept. 10 and at that time announced some store closures. However, in a Sept. 24 announcement the company expanded the list of closures and said it would realign operations around 37 core stores with one standalone pharmacy in the Pacific Northwest as part of its Chapter 11 process.

If approved by the courts, Gelson’s could purchase stores in Santa Monica, Del Mar, Ladera Ranch, Laguna Beach, La Jolla, Rancho Mirage and Thousand Oaks. Founded in 1951, Gelson’s currently operates 18 full-service specialty grocery stores in Southern California

A separate group of stores have been offered to Smart & Final LLC.

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