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The bankrupt Great Atlantic & Pacific Tea Co. (A&P) has filed suit in New York bankruptcy court against commercial real estate broker Lee & Associates, contending that the New York-based company placed bids totaling $11.8 million on two of the grocer's stores without revealing that the bids were on behalf of a third party, according to published accounts.
The lawsuit claims that Lee & Associates President James Wacht actually placed the bids for unqualified bidder Francisco Jin, who operates several Golden Mango grocery stores in the New York metropolitan area. "On numerous occasions, Mr. Wacht and Lee & Associates have misrepresented their relationship with Mr. Jin and hid their true intentions with respect to the purchase of the stores," the suit said.
The suit further notes that A&P was required by the court-approved bidding procedures to disclose at the time of the October auction of its stores the identity of each store's buyer when the bids were submitted. It wasn't until the day after the auction, however, that Lee & Associates sent the debtor lease sale agreement for the stores, listing Jin as the purchaser, A&P alleges.
Asserting claims for breach of contract against Lee & Associates, as well as an individual claim for misrepresentation against Wacht, the suit seeks at least $1.8 million in damages. In the meantime, A&P is moving forward with Food Bazaar, the backup bidder for both stores at issue.
Montvale, N.J.-based A&P filed for Chaptet 11 bankruptcy protection in July, the company's second bankruptcy in five years.