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SuperValu: Johnny Johnson Owes $3.8 Million
by Melissa Scott Sinclair
Johnson, who got his start with a $700,000 gift from the Ukrop family, built an inner-city grocery chain called Community Pride, which propelled him to local and national prominence. But ambitious expansion, including the development of the Shockoe Bottom store The Market at Tobacco Row, led Johnson to rack up tremendous debt with his suppliers and ultimately led to the collapse of his empire. (Johnson now runs a cleaning and repair service, Johnny On The Spot.)
SuperValu and Richfood filed a lawsuit Nov. 29 against Johnson's companies — Marketplace Holdings Inc., Community Pride Inc. and The Market LLC — to uphold an award determined by arbitrators Sept. 20.
The arbitrators had found that beginning in January 2002, SuperValu had given Johnson's companies a series of loans to support his business. The loans paid for inventory and for store equipment and remodeling, among other things, the arbitration agreement states.
By May 2004, the agreement continues, Johnson's companies had closed the stores and defaulted on the loans.
Johnson's companies were supposed to pay the $3.8 million plus interest by Oct. 20. "To date, the Companies have refused to comply with the Arbitrators' Final Award and have failed to remit any payment to SuperValu," the lawsuit states.
Verbena Askew, Johnson's attorney, says she can't comment on the suit. "We're actually pursuing the personal injury case," Askew says.
Johnson filed the suit against SuperValu and Richfood March 31, 2004. In it, he alleges that SuperValu and Richfood engaged in "questionable business practices" that harmed his companies, such as "being shorted on product deliveries" and improper collection of manufacturer's rebates.
Johnson also alleges that the companies interfered with his plans for expansion and growth, and that their actions caused him health problems, including ulcers, shingles and impotence.
SuperValu has tried to compel arbitration for this suit as well, Askew says, and is appealing a judge's ruling to go ahead with a jury trial. The case has been scheduled for trial April 12.
SuperValu and Richfood filed a lawsuit Nov. 29 against Johnson's companies — Marketplace Holdings Inc., Community Pride Inc. and The Market LLC — to uphold an award determined by arbitrators Sept. 20.
The arbitrators had found that beginning in January 2002, SuperValu had given Johnson's companies a series of loans to support his business. The loans paid for inventory and for store equipment and remodeling, among other things, the arbitration agreement states.
By May 2004, the agreement continues, Johnson's companies had closed the stores and defaulted on the loans.
Johnson's companies were supposed to pay the $3.8 million plus interest by Oct. 20. "To date, the Companies have refused to comply with the Arbitrators' Final Award and have failed to remit any payment to SuperValu," the lawsuit states.
Verbena Askew, Johnson's attorney, says she can't comment on the suit. "We're actually pursuing the personal injury case," Askew says.
Johnson filed the suit against SuperValu and Richfood March 31, 2004. In it, he alleges that SuperValu and Richfood engaged in "questionable business practices" that harmed his companies, such as "being shorted on product deliveries" and improper collection of manufacturer's rebates.
Johnson also alleges that the companies interfered with his plans for expansion and growth, and that their actions caused him health problems, including ulcers, shingles and impotence.
SuperValu has tried to compel arbitration for this suit as well, Askew says, and is appealing a judge's ruling to go ahead with a jury trial. The case has been scheduled for trial April 12.
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