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Thursday, August 24, 2006 - Page updated at 12:26 PM

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Larry's Markets split up in court

Seattle Times business reporter

After selling groceries to Seattle shoppers for more than four decades, Larry's Markets is being carved up for parts in bankruptcy court.

Under new deals outlined Wednesday, the Bellevue and Kirkland locations would be acquired by a real-estate firm that is looking for other retail tenants, and the Queen Anne store would become part of the upscale Metropolitan Market chain. They would pay $5.46 million for the three stores, according to court filings.

Larry's has interested buyers for the remaining three stores in North Seattle, Redmond and Tukwila, but officials could not predict when they might reach a deal. If they can't find buyers and the store contents are liquidated, that would bring an estimated $740,000.

That scenario would generate at least $6.2 million, more than the $5.5 million offered earlier for five stores by California investors who had planned to keep the Larry's name and upscale-grocery concept.

Larry's Chief Executive Mark McKinney said he was pleased with the sale of the Queen Anne store to Metropolitan Market for $1.63 million. Metropolitan Market needs to replace its current Queen Anne site, which is being redeveloped.

"I think that's a very good thing. It's a high-quality company, and they're excellent employers."

Metropolitan might hire some of Larry's displaced employees, he said.

The Bellevue and Kirkland stores will go for $3.83 million to real-estate manager TRF Pacific, which already manages the Bellevue property. TRF Principal Bob Parks said that he is trying to find new tenants for both locations.

G.I. Joe's is a possibility for replacing Larry's in Bellevue.

"We've looked at it, but nothing has been finalized yet," said Ron Menconi, vice president of marketing and merchandising for the Portland-based sports and auto-accessory retailer.

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If approved in bankruptcy court today, the deals would close by Sept. 1.

The California investors withdrew their bid during an auction for the stores on Tuesday, according to court filings. They had sweetened their offer in an attempt to fend off the bids from Metropolitan and TRF, but had also requested that the closing date be extended a month to Oct. 1.

Larry's could not afford a later closing date because it would have cost $400,000 to $500,000 to continue operating the chain through September and certain creditors must be paid by Sept. 1.

Melissa Allison: 206-464-3312 or mallison@seattletimes.com

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