In a recent legal filing, Kroger has asserted that C&S Wholesale Grocers is not entitled to the $125 million merger termination fee it is seeking to collect. This claim is based on allegations that C&S breached its contract with Kroger during the regulatory battle over its proposed combination with Albertsons. Kroger contends that C&S disparaged the divestiture deal to regulators, engaged in secret communications with Albertsons employees about the merger plan, failed to make necessary disclosures to Kroger, and did not follow the contractually required steps to prepare to run divested stores.

This legal dispute is the latest development in a series of lawsuits involving Kroger, C&S, and Albertsons following the collapse of their proposed merger. Kroger has accused C&S of acting in bad faith during the regulatory review process and subsequent litigation, specifically by failing to disclose communications with Albertsons that were relevant to the merger trial. Kroger also alleges that C&S tainted regulators’ perception of the divestiture deal, which was crucial for securing approval for the merger.

Furthermore, Kroger claims that C&S’s parent company withheld financial information from landlords seeking lease guarantees for divested assets and failed to obtain the necessary licenses and permits to operate the stores. In response, a spokesperson for C&S has disputed these claims and expressed confidence in prevailing in court.

The dispute between Kroger and C&S originated from their agreement to divest stores and assets to C&S as part of the merger proposal with Albertsons. However, after facing regulatory obstacles, the merger was ultimately blocked, leading Kroger to terminate the agreement with C&S. Subsequently, C&S sued Kroger for failing to pay the agreed-upon termination fee, while Kroger disputes the allegations of breaching the contract.

In addition to the legal battle with C&S, Kroger is also embroiled in a lawsuit with Albertsons over a $600 million termination fee and allegations of breaching the merger contract. Kroger has accused Albertsons of undermining its strategy to secure regulatory clearance for the proposed merger, claiming that Albertsons had “buyer’s remorse” and worked against Kroger’s interests.

Overall, the ongoing legal disputes between Kroger, C&S, and Albertsons highlight the complexities and challenges involved in large-scale mergers and acquisitions within the grocery industry. The outcome of these legal battles will have significant implications for the companies involved and may set precedents for future merger negotiations and disputes in the industry.