The bankruptcy case of Strack & Van Til parent company Central Grocers has been moved from a Delaware court to the U.S. Bankruptcy Court for the Northern District of Illinois, where creditors tried to force the embattled company into involuntary bankruptcy.
Judge Pamela S. Hollis issued an order moving the case back to Illinois, where Joliet-based Central Grocers is headquartered. The century-old wholesaler filed for Chapter 11 bankruptcy after it amassed $225 million in debt, and unpaid creditors filed an involuntary bankruptcy case, seeking to liquidate its assets and get whatever they could.
Hollis consolidated both bankruptcy cases and transferred the proceedings to Illinois because its court has jurisdiction over Central Grocers and many of the other parties involved. Central Grocers once supplied produce, meat, Centrella brand generic products and other supermarket staples to more than 400 independent grocers throughout the Chicago area.
All the orders of the U.S. District Bankruptcy Court in Delaware remain in full force, according to Hollis' order. That court authorized an auction in which Jewel-Osco put in a starting bid of $100 million for 19 remaining Strack & Van Til and Town & Country stores.
Jewel or the highest bidder will take over the stores while Central Grocers will wind down after a century in business.
The troubled wholesaler, which acquired Highland-based Strack & Van Til in the late 1990s, is closing 14 stores, mostly Ultra Foods discount supermarkets, and laying off nearly 2,000 workers. The fate of Ultra Foods stores in Highland, Merrillville and Kankakee remains undecided.
“The three Ultra stores were not included in the stalking-horse transaction; however, they are open and operating through the current timeline that has been established through the court-supervised process," a Central Grocers spokesman said in a prepared statement. "The company is continuing to explore all options in pursuit of a sale of those stores.”