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Judge Hopes Public Auction Will Revive Moo & Oink

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(CBS File Photo)

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CHICAGO (CBS) — A federal bankruptcy judge has ordered a public auction of the iconic Moo & Oink grocery store chain, which shut down in September.

As WBBM Newsradio’s David Roe reports, U.S. Bankruptcy Court Judge Jack Schmetterer ordered the auction of the chain at a hearing on Monday.

LISTEN: WBBM Newsradio’s David Roe reports

“It seems this is the best chance to get the company operating under new management and restore the business,” Schmetterer said at a hearing Monday. “I hope that works.”

Last week, Schmetterer told lawyers for Moo & Oink and its main creditor, First Midwest Bank, to put in writing assurances that the auction would be widely publicized and held in a venue large enough for former employees and the media to attend.

The auction will take place at 10 a.m. Dec. 14 at 111 S. Wacker Dr. in Room 2932 with room for 125 people.

The company’s business income had dropped to $18.9 million while it operated in 2011, compared with $29.2 million in 2010 and $39.3 million in 2009, court documents show.

Moo & Oink’s top 20 creditors are owed a collective total of $6.4 million.

Customers were shocked and disappointed when the announcement came that Moo & Oink might go out of business. Their chain’s commercials with the signature “Moo & Oink” jingle have been grabbing shoppers for years, and the stores have long been a staple in the African-American community.

Customers told CBS 2’s Pamela Jones in August that they never would have known the store chain was in financial trouble from the stacks of quality meat and produce you can still find on the shelves inside.

But on Sept. 9, Moo & Oink closed all four of its stores, at 7158 S. Stony Island Ave., 8201 S. Racine Ave., 4848 W. Madison St. and 3330 W. 183rd St. in Hazel Crest. The store’s e-commerce and wholesale operations also shut down, and all 200 employees were left jobless with no severance benefits.

Employees also complained that Moo & Oink did not to pay health benefits, vacation pay, pension contributions and automatic union dues in the months before the shutdown. A judge later approved payments for those benefits.

Now, attorneys say major retail chains are looking at the Moo & Oink properties. The company could be sold as a whole or in pieces, including its website and branded products as separate from the retail stores.

First Midwest Bank attorney Courtney Barr said one national retailer has expressed interest in buying the entire business.

A group of African-American investors also has expressed interest in buying Moo & Oink as a whole.

Best Chicago Meat Co., which makes burgers, hot dogs, sausages and Italian beef for retailers and restaurants, is interested in buying Moo & Oink’s intellectual property, including its branded products, said Best Chicago Meat Co. President Dave Van Kampen, who attended the hearing Monday.

Mari Gallagher, a Chicago consultant who has led research into the city’s food desert, said that retaining a business presence at the Moo & Oink locations in Chicago and protecting the food desert border from further erosion “is crucial if we want to continue making progress in shrinking the food desert.”

But Mary Steele, a spokeswoman for the former employees, said Monday she is concerned whether a new owner would rehire the former employees as union-represented workers.

“Will (a new owner) bring the employees back to work?” she said.

The lawyer for Mort Levy, who ran the company during its decline, said the business downturn was primarily due to the declining economy, increased unemployment, increased competition from value chains and a shrinking customer base that was growing older and smaller.

John Smith, a former Moo & Oink assistant district manager who worked there for more than 25 years, said in a recent interview that no other retailer has been able to convey the sense of fun, excitement and unique experiences.

“It brought tears to my eyes when I heard (Moo & Oink) might go out of business,” said Smith, who now works as an assistant manager at a Save-A-Lot store on the city’s South Side.

Smith valued his bosses at Moo & Oink — Barry Levy and Barry and Harvey Lezak — and credited them for hiring African-Americans and giving back to the community.

“This is something we built in the African-American community. The stores would have lines down the block trying to get in on any summer holiday, and we’d have a line out the door for fish on Fridays.”

“It needs to be saved,” he said. “We have to save it.”

The Chicago Sun-Times contributed to this report, via the Sun-Times Media Wire.

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