Federal court denies restraining order against Albertsons

The U.S. District Court for the District of Columbia (DC) on the afternoon of Nov. 8 denied the motion for a temporary restraining order (TRO) against Albertsons’ $4 billion special dividend payout. The special dividend was originally scheduled for Nov. 7 but was stopped by another TRO granted in Washington state on Nov. 3.

The plaintiffs in the case in the federal court are the attorneys general (AG) of California, DC and Illinois. The defendants are Kroger and Albertsons, the nation’s No. 1 and No. 2 grocery firms. Kroger and Albertsons announced the former’s intent to acquire the latter on Oct. 14. The details of the special dividend were included in the merger announcement. Albertsons has since stated the special dividend is not part of the merger deal and was decided independent of the merger; however, the special dividend will affect the final price per share that Kroger will pay in 2024 at the conclusion of the acquisition.

The AGs seek a preliminary injunction against the payout of the special dividend until these two states and DC can conclude their review of the merger. The TRO motion was to prevent the payout prior to a hearing on the preliminary injunction if the court decides to hold one.

The denial was a three-sentence order by U.S. District Judge Carl J. Nichols: “This matter is before the Court on Plaintiffs’ Motion for Temporary Restraining Order, ECF Nos. 4 and 7. For the reasons stated during today’s hearing, the Court DENIES Plaintiffs’ Motion. Accordingly, it is ORDERED that the Motion for Temporary Restraining Order is DENIED (sic).” Documents 4 and 7 were the motion for the TRO and the motion to seal the TRO motion respectively.

In documents filed on Nov. 4 outlining the arguments of both parties, the defendants argued the TRO was unnecessary in light of the Washington state TRO that already exists. That TRO remains in force until Nov. 10 when the Washington Superior Court in King County intends to hold its hearing on the preliminary injunction requested by the AG of Washington.

Albertsons stated that it would like to resolve all the legal challenges to the special dividend on or before the Nov. 10 hearing in Washington. The U.S. District Court in DC has not scheduled a hearing on the preliminary injunction requested by the AGs of DC, California and Illinois.