- Associated Press - Monday, October 20, 2014

BATON ROUGE, La. (AP) - Thibodaux retail grocery chain Rouses Enterprises and Baton Rouge-based grocery supplier Associated Grocers have reached an undisclosed settlement in a legal dispute.

The New Orleans Advocate reports (http://bit.ly/1r2T68i) James Swanson, a New Orleans lawyer for Rouses, would not discuss terms of the settlement. However, the chain’s managing partner, Donny Rouse, said in a statement Monday: “The Rouse family is very satisfied with this resolution.”

He said terms of the settlement are confidential.

Rouses had claimed in a lawsuit filed in state district court in Thibodaux that it was ousted improperly from membership in Associated Grocers in 2008 and was not compensated fairly for an ownership interest in the grocery distribution company. In addition to more than $900,000 in alleged damages, Rouses had sought return of its wholesale membership.

“Rouses will continue to obtain its grocery supply from Associated Wholesale Grocers,” Swanson said Monday.

Associated Wholesale Grocers is based in Kansas City, Kansas, and is not affiliated with Baton Rouge-based Associated Grocers. The Kansas food supplier reported sales of nearly $8.4 billion for the 2013 fiscal year.

Associated Grocers has said it did not wrongfully terminate Rouses and paid Rouses the correct redemption price for its stock.

Before last week’s jury trial, District Judge F.H. “Buddy” Larose on Oct. 3 had denied Associated Grocers’ request for summary judgment. The judge said he was “not convinced that the membership contract between AG and Rouses was terminable at-will.”

As far as the early redemption of Rouses stock for a 2007 price is concerned, Larose said: “The bylaws grant the power to surrender stock held by a member to that member, not the corporation. Thus AG, the corporation, did not have authority to surrender the stock” held by Rouses.

For more than 40 years, Rouses stores and Associated Grocers were each a part of the other’s growth.

Associated Grocers was founded in 1950 by 17 independent retail grocers and now serves a membership of more than 220 independent supermarkets in Louisiana, Texas and Mississippi.

Rouses Enterprises opened its first store in Houma in 1960, joining Associated Grocers in 1965. Rouses now has more than 40 stores.

The two companies’ relationship ended in late 2007 and early 2008 as the Rouses brand doubled through acquisition of 16 Sav-A-Center stores in the New Orleans metropolitan area. What happened after those purchases was a matter of dispute at the Thibodaux courthouse in six years of courthouse filings.

Lawyers for Associated Grocers said Rouses began considering membership termination in November 2007, when it unilaterally sought bids from alternative suppliers. Officials of Rouses acknowledged in court documents that they sought supply proposals from several firms after they added the large group of New Orleans-area stores to their assets. They said they were shocked when Associated Grocers proposed to increase the mark-up on Rouses’ groceries.

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Information from: The New Orleans Advocate, http://www.neworleansadvocate.com

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