MILLWOOD, N.Y. -- The Great Atlantic & Pacific Tea Company, Inc., better known as A&P, is suing the buyer of its Millwood store for failing to close on the $2.4 million transaction.
The bankrupt grocery chain, which is liquidating its assets, filed on Wednesday what is called an adversary complaint against Millwood Merchant, LLC, a company owned by Jamie Luna.
Luna's brother, Ruben, who initially made a winning bid at an October bankruptcy auction before transferring the buying rights to his sibling's company, is named as a co-defendant. A&P, in its filing, argues that New York state law does not absolve Ruben Luna of liability in the matter.
Failing to close on the sale constitutes a breach of contract, A&P argues. A&P's store sale have been structured by transferring the locations' leases and other assets to buyers.
A&P is seeking damages in an amount that include the failed purchase price, interest and attorney fees.
As part of its lawsuit, A&P submitted a Nov. 19 letter from Harlan Lavine, Millwood Merchant's attorney, to company executives informing them that his client would not close on the purchase. The buyer had a deadline of Dec. 8 to close on the purchase, A&P notes.
In the letter, Lavine cited concessions needed to satisfy objections to the sale as a factor in his client not following through on the deal. He also refers to his client as "Millwood" as an abbreviation.
"Although not the only basis, certain concessions that were required of Millwood and its principal in order for the objecting parties to withdraw their objections would deprive Millwood Merchant LLC of the transaction it had bargained for."
The store's landlord, Millwood Center, LLC, objected to the entity's purchase in an October court filing. A hang up between the two parties was over the landlord requesting an assurance guarantee of future financial performance. The landlord sought the guarantee in connection with a planned attempt to refinance its mortgage on the property.
Lavine declined to comment on the lawsuit, noting he had not shared it with his client.
A&P recently closed its Millwood location, which is an anchor storefront for the Millwood Plaza shopping center. Lights inside remain on but shelves have been stripped bare of inventory.
While the store is now closed, it is technically not vacant.
P. Daniel Hollis, attorney for the landlord, told Daily Voice that A&P was still paying rent. While Hollis declined to discuss the merits of A&P's lawsuit, he added that he hopes it will be resolved and that someone will lease the space.
It is not clear whether A&P has any replacement buyers lined up. Hollis was unsure whether there were any buyers, while Garrett Fail, a bankruptcy attorney for A&P, said he was not going to be able to give information.