Haggen Holdings asset sale approval order upheld by district court

By Caroline Salls

Pittsburgh, Aug. 31 – An order approving Haggen Holdings, LLC’s asset sale was upheld in an appeal ruling made Thursday by the U.S. District Court for the District of Delaware.

As previously reported, the U.S. Bankruptcy Court for the District of Delaware approved the asset sale on Nov. 24, 2015.

Antone Corp. appealed the sale order in connection with an objection to the assignment of a commercial property lease with Haggen Opco South, LLC.

In the objection, Antone claimed that the assignment must include enforcement of a profit-sharing provision included in the lease, which Antone said would entitle it to 50% of any net profits upon assignment.

According to Thursday’s opinion, the bankruptcy court ruled that the anti-sharing provision is an unenforceable anti-assignment provision under the Bankruptcy Code.

The district court said in its ruling that courts have routinely found profit-sharing provisions to be unenforceable.

If enforced, the court said the profit-sharing provision would prevent Haggen from realizing the full value of its asset.

“Throughout these proceedings, Antone has cited no case enforcing a profit-sharing provision against a debtor in favor of a landlord,” the district court order said.

“Nor does Antone cite any authority in support of its argument that it had a property interest in sale proceeds from the lease assignment.”

Based in Bellingham, Wash., Haggen is a supermarket company. It filed for bankruptcy on Sept. 8, 2015 under Chapter 11 case number 15-11874.

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