Des Moines grocery chain auctioned off in bankruptcy court

DES MOINES, Iowa (AP) - A Des Moines-based grocery store chain that filed for bankruptcy in November has been auctioned off piece-by-piece to the highest bidders.

On Friday, in a Des Moines bankruptcy court, Associated Wholesale Grocers Inc. bought the non-grocery assets of seven of Dahl's Foods Inc.'s 10 stores for $2.45 million, the Des Moines Register reported (http://dmreg.co/1KgE9Zs ). Associated Wholesale, a member-owned wholesale cooperative, said those stores will be remodeled and renamed.

The cooperative - Dahl's supplier and its largest creditor - bought the seven stores in 2011 and leased them back to the company. It also lent Dahl's $6.6 million to continue operating during the bankruptcy and will pay an undetermined amount for the store's inventory.

Iowa grocery chain Hy-Vee bought the assets of the pharmacies at Dahl's three other stores for $515,000. Pharmacy customers will be notified before their prescriptions are moved to Hy-Vee.

Kum & Go Inc. bought a West Des Moines Dahl's location for $3.5 million. It plans to build a convenience store there.

Equity Ventures Commercial Development bought the store at 8700 Hickman for $2.8 million. It plans to close the store and redevelop the property into retail or commercial space.

The remaining store was not sold and will close in March. A company hired to liquidate the store's assets is expected to begin that process Monday.

Dahl's estimated 700 employees will be able to reapply for jobs at the remaining stores, Associated Wholesale attorney Mark Benedict told the bankruptcy judge.

Unsecured creditors are owed nearly $1.6 million and will likely be paid because of the success of the auction, said attorney Thomas Fawkes, who represents the unsecured creditors.