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Bottling plant Le-Nature's sale on hold while trustee investigates bidding

Posted in : Taxonomy

(added few years ago!)

A supermarket chain's $20 million (€15 million) purchase of the Le-Nature's bottling plant is on hold while a trustee investigates allegations of improper bidding during a bankruptcy auction.Giant Eagle outbid Cadbury Schweppes Beverage Group, the beverage arm of U.K.-based Cadbury Schweppes PLC, earlier this month for the Latrobe plant.Bankruptcy trustee R. Todd Neilson, however, is looking into allegations that Giant Eagle threatened to stop selling Cadbury Schweppes products — including 7 UP, Canada Dry and Dr Pepper — if the soft-drink maker outbid it."We consider this to be a serious incident," Neilson told the Pittsburgh Tribune-Review for Wednesday's editions. "I"m not saying anything illegal, unethical, or improper occurred at this time."U.S. Bankruptcy Judge M. Bruce McCullough, who oversaw the plant auction Aug. 9, has scheduled an Aug. 30 hearing to discuss the allegations.O'Hara Township-based Giant Eagle has 225 supermarkets and more than 125 fuel and convenience stores in western Pennsylvania, Maryland, Ohio and West Virginia. It plans to produce a line of soft drinks at the plant.Giant Eagle spokesman Daniel Donovan declined to comment on the allegation, but said the company is cooperating with the bankruptcy trustee's investigation.

Neilson said he received an anonymous call about the alleged impropriety after the judge confirmed Giant Eagle's winning bid. McCullough and other attorneys indicated at a bankruptcy hearing Wednesday that they received letters last week advising them of possible problems with the auction."Without the information that came to us in form of letters, none of us suspected we lost an opportunity for more money," said Richard Werder, an attorney who represents lenders owed money by Le-Nature's.Cadbury Schweppes attorney Gary Nelson declined to comment during a bankruptcy hearing Wednesday at which the investigation was discussed. Cadbury Schweppes officials did not immediately respond to an e-mail request for comment Wednesday.Le-Nature's was forced into bankruptcy last year after a judge ruled that founder and chief executive Gregory J. Podlucky and other directors may have committed accounting fraud. A federal investigation is under way.The plant closed in November, leaving 240 employees out of work. Creditors say the company racked up debts of more than $820 million (€608 million), according to court documents.Giant Eagle had plans to reopen the facility in about eight weeks and hire about 50 workers.

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(added few years ago!) / 306 views