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updated: 4/20/2017 3:37 PM

Lawsuit seeks to block company from selling grocery stores

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CHICAGO -- A Chicago-area labor union has filed a federal lawsuit to block a company from selling two grocery store chains in Illinois and Indiana to an unknown buyer.

Teamsters Union Local 703 represents about 300 warehouse workers of Central Grocers, a grocery cooperative based in Joliet. The union wants a judge to temporarily stop the company from selling its business, arguing that such a sale would violate collective bargaining agreements unless the purchaser adopted them.

The Chicago Tribune reports a public relations firm for Central Grocers largely declined comment, saying only that the company was "exploring strategic alternatives."

Central Grocers announced plans Tuesday to sell 22 Strack & Van Til stores in Illinois and Indiana. It also plans to close nine Ultra Foods stores, including some in the Chicago area.

The grocery cooperative, which was incorporated in 1917, operates as a wholesaler to independent grocery retailers in the Chicago area that are members of the co-op. The nine "underperforming" Ultra Foods stores include locations in Calumet Park, Chicago Heights, Forest Park, Joliet, Lansing and Wheaton.

Central Grocers said in a letter to co-op members in February that its board of directors hired New York-based Peter J. Solomon Co., an investment banking advisory firm, to consult.

"That process has produced several indications of interest from multiple parties hoping to expand their presence here in our marketplace," the letter said.

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