A New York Bankruptcy Court filing shows that A&P is suing commercial real estate broker Lee & Associates for failure to disclose that its $11.8 million purchase of stores was on behalf of a third party.
A&P alleges that Lee & Associates President James Wacht claimed that he was placing bids for stores in New Jersey and Brooklyn on behalf of the firm, when the bids were actually made on the behalf of Fransisco Jin, an unqualified bidder and operator of a number of Golden Mango grocery stores in New York.
“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 lawsuit said, according to Law360.
A&P was required to disclose the purchaser for each store when each bid was submitted. After the auction, Lee & Associates submitted documents that indicated Jin was the buyer, Law360 reports.
“Neither Mr. Wacht nor any other representative from Lee & Associates had identified Mr. Jin at the auction, despite the requirements of the global bidding procedures and the bidding procedures,” the lawsuit said. “Rather, at all times during the auction, Mr. Wacht held himself out as acting on behalf of and submitting bids on behalf of Lee & Associates.”
The blunder has led A&P to instead sell the stores to backup bidder Food Bazaar.
The bankrupt retailer is now seeking at least $1.8 million in damages from Wacht.
For more on this lawsuit as it develops, stay tuned to DeliMarket News.