An auction is scheduled for 10 a.m. Wednesday, Nov. 29, in Milwaukee for the six remaining Gordy’s Market stores, including the ones in downtown Chippewa Falls, Lake Wissota and Cornell. The other Gordy’s stores in the auction are in Barron, Chetek and Ladysmith.
The winning bids will be taken before Chippewa County Judge James Isaacson for approval in a hearing at 1:30 p.m. Monday, Dec. 11.
The auction and Dec. 11 court session signal the dizzyingly decline of the financially troubled Gordy’s stores, which began in 1966 and by its 50th anniversary last year had more than 20 stores stretching from Rice Lake to La Crosse.
The procedures of the auction at the Milwaukee Athletic Club, 758 N. Broadway, in Milwaukee are spelled out in a document filed Monday by Receiver Michael Polsky.
Bids will be taken until 5 p.m. Monday, Nov. 27. Only those with what the court document said are qualified bids will be allowed to participate in the auction. A qualified bid must have an earnest money deposit of 5 percent of the purchase or $50,000, whichever is greatest.
The auction will be in rounds. Each bidder will have 15 minutes in each round to make a bid.
Each of the six stores is considered a lot. “Bids for a portion of a lot will not be considered. All bids are subject to approval of the court overseeing the receivership proceedings,” the document said.
“If the successful bidder fails to close for any reason other than a material default by the receiver, the successful bidder’s earnest money shall be forfeited to the receiver as liquidated damages,” the document said.
Madison attorney James Sweet said he represented some members of the Schafer family wanting to buy the six stores. However, there is no guarantee that will happen.
Polsky was appointed receiver under Chapter 128 of Wisconsin law as grocery supplier Nash Finch filed a lawsuit against Gordy’s Market, seeking $86 million. Settler’s Bank of Madison is seeking another $4.9 million. Gordy’s in October said the amount it owes Nash Finch is $44,154,136, plus what it calls liquidated damages, costs and attorney fees. Polsky said employees of Gordy’s have put in claims they are owed $51,650 as of Monday, Oct. 23. That number has since risen.
Polsky said as of the same date, there are unsecured claims against Gordy’s filed for $10.4 million. (The publisher of the Herald, River Valley Newspaper Group, has filed one of those unsecured claims.)
The court document filed by Polsky also outlines how companies can get a step ahead of other bidders.
“The receiver shall have the right to designate one or more entities to serve as the initial bidder (a ‘stalking horse bidder’) for the (stores). As part of its bid, the Stalking Horse Bidder will be required to submit an earnest money deposit of 5 percent of the purchase price or $50,000, whichever is greater. Qualified bidders will be notified immediately if the receiver, with the consent of the lender (Nash Finch), accepts a stalking horse bid.”
Sold on Sept. 28 to various buyers were locations in Black River Falls, Osseo, Augusta, Whitehall, Shell Lake, Spencer, Rice Lake, and closed stores on Hamilton Avenue and Clairemont Avenue (near Shopko), both in Eau Claire, Hayward and Chippewa Commons. Earlier, In other decisions, Isaacson approved the sale of three Gordy’s locations, including Tomah and two in Eau Claire, to Festival Foods and in October he approved the sale of Gordy’s locations in Arcadia, Galesville and La Crosse.