Chesterton Tribune

 

 

Strack Van Til families' bid for 20 stores gets court OK

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By KEVIN NEVERS

The Strack & Van Til grocery stores are now officially back in the family.

On Tuesday, the U.S. Bankruptcy Court for the Northern District of Illinois approved a purchase agreement under which the Indiana Grocers Group--comprised of both the Strack and the Van Til families as well as other investors--will acquire 20 Strack & Van Til stores from the majority owner, the bankrupt Central Grocers Inc. of Joliet, Ill.

Among the 20 stores: the Chesterton location at 1600 Pioneer Trail.

Indiana Grocers Group bid $91.3 million for the stores, or about 30 percent more than the original $70-million bid made by Jewel-Osco, Central Grocers’ stalking-horse. Indiana Grocers Group will also pay up to an additional $30 million for remaining inventory.

Per the U.S. Bankruptcy Court’s order, the purchase price includes the payment to Jewel-Osco--from the proceeds of the sale--of a so-called “break-up fee” of $3 million and reimbursement of up to $500,000 in expenses incurred by Jewel-Osco in the stalking-horse process.

That order notes that the purchase price bid by Indiana Grocers Group’s “constitutes fair and reasonable consideration for the acquired assets, is the highest and best offer for the acquired assets, and will provide a greater recovery for (Central Grocers’) estates and creditors than would be provided by any other practically available alternative.”

Central Grocers filed for Chapter 11 bankruptcy protection on May 4, attributing its dire financial straits to a combination of factors, including online competition, consumers’ changing tastes, and plummeting food prices which have prompted grocery retailers to engage in “aggressive price wars.”

On May 13, Central Grocers announced that Jewel-Osco had entered into a stalking-horse agreement to acquire 19 Strack & Van Til stores for a total price of $100 million. Under the terms of that agreement, in the event of Central Grocers’ receiving a higher bid than $100 million, it would pay Jewel-Osco a “break-up fee” and reimburse it up to $500,000 in expenses.

At the time Jewel-Osco said that it had no plans to close any of the 19 Strack & Van Til stores, including the Chesterton location, located roughly one and half miles from Jewel-Osco’s store at 747 Indian Boundary Road.

Strack & Van Til in Chesterton

In December 2012, Strack & Van Til purchased eight groceries owned by WiseWay Supermarkets, including WiseWay’s Chesterton location. Strack & Van Til immediately undertook a major remodeling of the former WiseWay, which opened in February 2005. That 60,000-square foot grocery nearly tripled the space of the old WiseWay--formerly Costas Foods--located at Broadway and Eighth Street in Chesterton.

The Strack & Van Til chain had its origin in 1959, when independent grocers Ernie Strack and Nick Van Til merged their businesses, bought a 10-acre parcel in Highland, and built the first Strack & Van Til grocery. Over the years the company opened new stores under the Strack & Van Til, Town & Country, and Ultra Foods banners, at one point operating 38 different ones.

 

Posted 7/19/2017

 
 
 
 

 

 

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