Moo & Oink attracting attention of major retailers

• Reprints

Updated: December 13, 2011 8:42AM

Major retail chains are looking at the Moo & Oink properties, according to an attorney. The company could be sold as a whole or in pieces, including its website and branded products as separate from the retail stores.

A bankruptcy judge said at a hearing Thursday that he would be open to a well-publicized auction of Moo & Oink, a 150-year-old icon of quality, affordable and culturally attuned sales of meats, ribs, pork and chitterlings in the African-American community. He set a court date Monday to hear more about plans to auction the company, and possibly approve the sale.

“Come back with a description that will assure me of maximum publicity in a room large enough for the former employees to attend as well as the media,” said U.S. Bankruptcy Court Judge Jack Schmetterer, who had placed Moo & Oink in Chapter 7 bankruptcy on Sept. 30.

Moo & Oink has stores on the edges of the city’s so-called “food desert, and so has drawn interest, said Courtney Barr, the lawyer for Moo & Oink’s sole secured creditor, First Midwest Bank. The Chicago stores are at 7158 S. Stony Island, 4848 W. Madison and 8201 S. Racine.

“Food desert” neighborhoods have started attracting investments from big-name retailers such as Wal-Mart, Walgreen, Target, CVS, Supervalu and Food 4 Less, which have sought to relieve the lack of affordable fresh foods by opening stores or expanding selections of fresh fruits, vegetables and other healthy food choices at existing stores.

Indeed, Schmetterer in an earlier hearing had suggested Moo & Oink’s bankruptcy trustee, attorney Michael Desmond, advertise the company’s sale specifically to food companies and others in the industry that might have an interest.

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

Moo & Oink’s demise put 200 employees out of work on Sept. 9 after it closed its three stores in Chicago, its grocery store in south suburban Hazel Crest and its e-commerce and wholesale operations. The employees received no severance benefits.

Barr had told the judge at an Oct. 19 hearing that the bank is paying $20,000 a month to ensure that Moo & Oink’s properties are secured and to store inventory of boxed and canned goods. She said Thursday that while major retailers’ interest is high in the food desert, “we have to strike while the iron is hot.”

“If there is a chance for these stores to reopen, now is the time to do it,” she said.

Mort Levy conveyed title on July 29 for Moo & Oink’s assets to be sold after they tried unsuccessfully to sell the business in 2010. For years, the company had courted customers with a neighborhood friendliness and fun-filled advertising campaigns featuring cow and pig mascots and a “moo and oink” radio jingle.

But its revenues declined steadily, with business income dropping 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.

The largest creditor is the employees’ union, United Food and Commercial Workers Union Local 1546, and the union pension and health and welfare funds, which claim that Moo & Oink owes the pension and other funds $3 million.

Moo & Oink disagrees that it owes $3 million to the pension fund, said attorney Rick Firfer, who represents Moo & Oink.

The next largest creditors are Mort Levy, the former Moo & Oink president who is part of the company’s founding families, and who invested nearly $1 million of his own money to try to save the company as it slid toward bankrutpcy, and his second cousins, former company shareholders Barry Lezak of Deerfield and Harvey Lezak of Northbrook, who are owed $540,700 and $425,000, respectively. Mort Levy declined comment Thursday.

Other creditors include food companies with whom Moo & Oink did business: Calumet Meat Co., a Moo & Oink affiliate owed $145,170; Dutch Farms Inc. of Chicago, owed $143,458; and Consolidated Catfish Producers of Nashville, Tenn., owed $90,600, according to court documents.

Moo & Oink also owed $133,500 in fees to turnaround specialist Silverman Consulting, and $101,000 to Greenberg Traurig, LLP, a law firm representing Moo & Oink in a trademark infringement lawsuit against Dutch Farms, the court documents showed.

The conglomeration known to the public as Moo & Oink consists of a group of companies made up of four corporations and two limited liability companies, of which Mort Levy is the principal. The two main corporations are Moo & Oink Inc., the retail operation, and Calumet Meat Co., the wholesale operation.

The other two corporations are Ms. Mollye’s Inc. and BBHM Management Co.

The two limited liability companies are Home of Moo & Oink, LLC, and Your Meat Store & More, LLC.