Fleming Bankruptcy Sale Continues

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Fleming Bankruptcy Sale Continues

LACROSSE, Wis. -- Fleming Cos. has agreed to sell its wholesale grocery business, including warehouses in Waukesha and La Crosse, to a Vermont-based company.

C&S Wholesale Grocers Inc., a privately held firm that reports annual sales of $11 billion, has agreed to buy Fleming's wholesale business for an undisclosed price. If approved by the bankruptcy court, the sale would make C&S a supplier to around 60 independently owned Sentry Foods supermarkets in Wisconsin. The sale reportedly does not include Fleming's warehouses in Marshfield and Superior, which the company announced earlier this month would be closing.

Officials at Fleming and C&S Grocery were unavailable for comment Monday.

The deal would leave Fleming with only its Core-Mark distribution business, which supplies groceries and other items to convenience stores.

C&S Executive Vice President Mark Gross said in a statement that the purchase would allow the Brattleboro, Vt.-based company to expand its business into parts of the country where it does not currently operate.

C&S operates 18 warehouses in the Northeast. Lewisville, Texas-based Fleming was the nation's largest supermarket wholesaler until it lost business when its largest customer, Kmart Corp., declared bankruptcy.

Fleming, which is reorganizing under Chapter 11 protection, expects to file a motion with the U.S. Bankruptcy Court in Delaware to establish procedures for the C&S sale. Fleming said it expects to request that the court set an auction for the sale of the grocery wholesale business by the end of July, with the highest or best offer presented for approval in early August.

"These actions represent major steps in Fleming's Chapter 11 process," said Pete Willmott, Fleming's interim president and chief executive officer. "We believe the best way to maximize the value of the business for our constituents is to sell Fleming's grocery wholesale business to a strong buyer who can provide our customers with the service and reliability they need."

Fleming earlier this month sold 30 Rainbow Foods stores in the Minneapolis-St. Paul area and in Wausau, Wis., to Pewaukee-based supermarket operator Roundy's Inc. for $120 million. The company also is trying to sell four Rainbow stores in Milwaukee.