Union Plan To Sue Hafts Over Potential Lost Wages And Benefits
WASHINGTON (AP) _ The United Food and Commercial Workers Union said Monday it plans to sue Dart Group Corp. for an unsuccessful takeover attempt that the union claims may put over 9,000 Bradlees employees out of work.
Carey Butsavage, an attorney for the UFCW, said the union will seek to make Dart Group, based in Landover, Md., reimburse employees for any lost wages they would have earned under their current union contracts.
The UCFW also wants Dart to pay the costs of employees’ medical insurance and retraining.
Bradlees is a discount store chain owned by Boston-based Stop & Shop Cos. Inc., the target of an unsuccessful buyout attempt by the Hafts earlier this year. Stop & Shop decided to sell many of its Bradlees stores to help pay the debt it incurred in a $1.23 billion leveraged buyout undertaken to thwart Dart.
″A leveraged buyout blocked the Haft takeover but they walked away with their customary fat profit - this time, $17 million,″ said Tom McNutt, president of Local 400 of the UCFW. ″Bradlees employees had their jobs sold out from under them to pay the costs of the Haft raid.″
Dart Group, controlled by Herbert Haft and his son Robert, has been involved in a number of unsuccessful takeovers.
Robert Haft, Dart Group president, on Monday defended his companies’ actions in a press release saying, ″The claims are without merit and appear to be a publicity stunt.″
The civil suit was to be filed in Camden, N.J., the union said. Court papers were made available to reporters Monday, but court officials in New Jersey could not immediately say whether the suit actually had been filed.
Although Dart controls retail operations of its own, such as Crown Books, the Hafts have earned a reputation as corporate raiders by launching bids for several major retailing chains such as Supermarkets General, Safeway Stores and Eckerd Corp.
None of the raids have been successful, but in most of them Dart reportedly has profited by selling its stock to the target company or a rival bidder.
Dart launched its bid for Stop & Shop in January. Following a similar pattern, Stop & Shop’s stock price soared as management fought to remain independent and speculators anticipated a bidding war.
Stop & Shop finally agreed to a leveraged buyout arranged by New York-based Kohlberg Kravis Roberts & Co. In such deals, a company is acquired mainly with borrowed funds that are repaid with the company’s cash flow or money raised by the sale of its assets.
The deal allowed Stop & Shop to remain independent, but to pay the enormous debt it had to sell part of its underperforming Bradlees division. Hechinger Co. bought the leases to 47 local Bradlees stores.
In May, Stop & Shop said it would sell all of the 58 Bradlees stores in its Southern divison, including southern New Jersey, Maryland and Virginia, approximately one-third of the Bradlees it owns. The company decided not to sell its 113 Stop & Shop stores.