Price Chopper is taking Penn Traffic to court for $1.62 million claiming it was damaged when Penn Traffic negotiated a deal to sell all of its supermarket assets to Tops Markets. In a complaint filed in federal court late this afternoon Price Chopper criticizes Penn Traffic and Tops for negotiating after Price Chopper and Penn Traffic had agreed in December to a private sale of 22 P&C stores for $54 million.
The amount of the judgement being requested is based on 3% of the $54 million price. That was the amount of a break up fee agreed to in the Price Chopper 22 store deal that would have been paid to Price Chopper had its price been surpassed after the judge signed off on the deal. Judge Peter Walsh never signed the Price Chopper deal because it was removed from the January 8th agenda and was replaced by the Tops agreement to buy all the assets for $85 million.
The court documents reveal more about negotiations as they unfolded in December and January. At one point in early December Tops and Price Chopper were working together on a bid to purchase Penn Traffic. The cooperative offer was rejected by Penn Traffic over concern the two supermarket chains were colluding on the price to keep their costs down. After that deal was rejected Price Chopper agreed to the 22 store sale.
After the New Year Price Chopper became aware of Tops negotiating with Penn Traffic. Price Chopper's attorneys sent a letter to Tops warning them about "tortuous interference" with Price Chopper's agreement with Penn Traffic. Price Chopper did not know the details of Tops pending agreement with Penn Traffic until it was revealed in an early morning court filing on January 8th.
Price Chopper has brought this matter before the bankruptcy court because Judge Peter Walsh continues to have jurisdiction in the case. It acknowledges there is no longer another remedy to its harm because the Tops deal has been approved by the court. That is why it is asking for $1.62 million as a judgement to make up for the time, money and other resources Price Chopper put into its bid to buy the 22 stores.
