BELLINGHAM, Wash. (AP) — Albertsons will pay $5.75 million to settle a lawsuit that sought up to $1 billion in damages related to the sale of stores to Haggen, currently involved in bankruptcy proceedings.

The Bellingham Herald reports Haggen said in the lawsuit that Albertsons systemically eliminated competition in more than 130 local grocery markets across five states.

Albertsons released a statement saying that the settlement avoids costly litigation and that the company still believes the lawsuit's assertions lacked merit. Spokesman Brian Dowling says the company's $41 million unpaid inventory lawsuit against Haggen would be dropped if the settlement agreement is approved by the bankruptcy court.

Haggen officials had no comment. An auction of 33 stores was set for Feb. 5.

The bankruptcy filing followed Haggen's struggle to convert 146 stores purchased from Albertsons and Safeway.

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