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MAHONING VALLEY Assigning blame in the demise of Phar-Mor



Published: Thu, July 25, 2002 @ 12:00 a.m.



Resentment over the deal to close the drug chain's stores runs deep.

By ROGER G. SMITH

CITY HALL REPORTER

YOUNGSTOWN -- Giant Eagle is overstepping its bounds and should be boycotted.

The judge didn't do enough.

Phar-Mor executives are the real bad guys.

There's a deep well of public resentment in the aftermath of the Phar-Mor bankruptcy and liquidation, with roots in all the above statements.

The Vindicator asked members of its News Contacts e-mail group Tuesday and Wednesday for their thoughts.

Giant Eagle is taking over the local Phar-Mor locations but without plans to operate any stores. The company also controls the Tamco warehouse in Austintown but won't use it and may sell it.

For every person who said they understand Giant Eagle's moves and chalk it up to the facts of business life, there were five others among the 82 e-mails who object and have a problem with the whole scenario.

Targeting Giant Eagle

Lots of people said they view Giant Eagle as buying up the Phar-Mor locations simply to eliminate their competitor.

"This deal was nothing but another deal by Giant Eagle to control the marketplace of this area. They are no different than other big corporations of America. Giant Eagle has made millions of dollars in this Valley. Now they destroy the livelihoods of hundreds of people. In turn, this Valley should abandon Giant Eagle. I have!" said William Longley of Hubbard.

"Our choices as to where we shop are getting smaller. I think that is bad for the consumer. I think the word Giant says it all," said Rich Harvey of McDonald.

"The deal doesn't appear to be a good one for the people. More lost jobs, more empty buildings. The corporations will always take care of their interests first. That's what's wrong with the Valley, and that's what's wrong with the country," said Betsy Johnquest of Youngstown. "I'll start giving my money to the local Sparkle markets."

Blaming the judge

Some people focus more on U.S. Bankruptcy Court Judge William Bodoh, who approved the deal, than Giant Eagle.

"I do have a problem with our esteemed bankruptcy judge that would allow it to come about. Someone needs to remind him that this community needs help and eliminating employers is not the way to go. He may have followed the law when making his decision, but it sure wasn't good for a whole group of loyal Phar-Mor employees. The whole thing stinks," said Gary Pollock of Canfield.

"I don't understand why Judge Bodoh accepted the Giant Eagle offer. Why would Giant Eagle want to operate any of the stores since they already have pharmacies in all their grocery stores?" asked George Grim of Youngstown. "Once again the only losers in this whole episode are the people of the Youngstown area."

Because of written complaints about the deal, Judge Bodoh said he spent considerable time reviewing whether he should stop the sale because Giant Eagle, a competitor to Phar-Mor, was involved. He ultimately decided that the issue was beyond his scope under bankruptcy law.

Judge Bodoh also had numerous requests from public officials and others asking him to delay a ruling. The hope was that another company would renew earlier efforts to buy the warehouse and 30 of Phar-Mor's 73 stores. That would have preserved jobs and stores. Bankruptcy law wouldn't allow him to do that, however, the judge said.

In an earlier order, the judge found that Phar-Mor was justified in selling its assets and it was up to Phar-Mor and its unsecured creditors to determine the best bid. Both told him they agreed with the Giant Eagle deal.

Management's fault

Finally, some people go back to what they say started it all: Phar-Mor mismanaging itself.

"Put the blame where it belongs. Phar-Mor [executives] did this to themselves and to the employees," said Suzanne Melia of Boardman.

"Phar-Mor, yet another story of executive theft, by fraud and deception. The loss of a highly successful and profitable business is the result. Once again, many working people and their families suffer hardship, and investors sustain losses," said Thomas Young of Salem. "There is no charity in business, but there seems to be an abundance of illegal greed. Let's hope someone will use the facilities again. Otherwise, what is left behind are families without income.

rgsmith@vindy.com




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