The union representing Haggen workers has been picked as one of the seven members of a committee representing unsecured creditors, giving it some influence in the bankruptcy process.
The union representing Haggen’s workers is getting a seat at the table on the struggling grocery chain’s bankruptcy reorganization, although it’s unclear how much influence it will be able to exert in the process.
Documents filed with a bankruptcy court in Delaware showed the U.S. Trustee’s office overseeing the case picked United Food and Commercial Workers International as one of the seven members of the unsecured creditors committee.
The members represent the dozens of parties to whom Haggen owes money, but whose claims are not backed by collateral assets. In bankruptcies like this one, these parties, usually suppliers, workers and service providers, tend to get the short end of the stick.
The other members of the committee are distributor Unified Grocers, PepsiCo, Starbucks, Santa Monica Seafood, Valassis Communications and Spirit SPE HG, a retail landlord.
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Experts say the committee can play a sizable role when a company reorganizes under bankruptcy because it gets privileged access to information that can allow it to push for changes. Tom Geiger, a spokesman for UFCW Local 21, in Western Washington, says that the committee can employ lawyers and financial experts to closely monitor the company’s actions and gives the union “more leverage” in the process.
Nearly 11,000 employees have been caught in the quagmire of Haggen’s ill-starred bid for West Coast expansion by acquiring 146 stores from Albertsons and Safeway in the wake of their merger. The optimism shown at the acquisition, approved by regulators in late January, was quickly replaced by confusion during the transition, as unexpectedly higher prices turned off many customers.
Layoffs, reduced hours, store closures and lawsuits soon followed, and Haggen filed for Chapter 11 bankruptcy earlier this month. Courts documents have shown that Haggen expects to quickly retreat into a vastly reduced footprint around its original stores in the Pacific Northwest and an unspecified number of others, as it sells or closes many other stores.
Many workers now face displacement if the company cannot sell off its stores. Even those who remain at locations destined to stay open face disruption due to bumping rights based on seniority.
“The failure of Haggen has affected all of us,” said Terry O’Toole, a worker at a Haggen location in Gig Harbor.
In the meantime, however, Haggen is still posting jobs. On Wednesday it advertised for a baker at its Redmond location, a former Albertsons. Most job postings were in Washington, Oregon and Arizona. The company didn’t immediately reply to a request for comment on the job postings.
While a seat at the committee provides a nice perch and some voice during the bankruptcy process, it also means that the party represents itself and also the entire group of unsecured creditors, writes Peter deChiara, a New York-based attorney with Cohen Weiss and Simon, said in a 2014 blog post urging unions and funds to participate in the committee.
Greg Conger, the president of UFCW Local 324 in Southern California, where Haggen has struggled especially hard, says that “it remains to be seen what influence we’ll have. Time will tell.”