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Bankrupt online grocer Webvan said Thursday a judge had approved the sale of many of its assets to Kaiser Foundation Hospitals, which outbid Webvan's founder for ownership of the inventory-management technology platform.
Kaiser, a division of health care giant Kaiser Permanente, will pay US$2.65 million for Webvan's software platform and other intellectual assets, including the Webvan.com and HomeGrocer.com domain names. The technology reportedly cost Webvan about $100 million to develop.
But Webvan said the value of the deal 
was much higher because Kaiser will also take over
Webvan's fully automated Oakland distribution center. Kaiser agreed to pay $1.4 million
for the technology at that facility and agreed to take over Webvan's lease.
"This deal represents a significant value for our creditors," said Scott McNutt, an attorney working with Webvan's unsecured creditors.
Borders Out
The agreement also undoes a preliminary plan to sell the bulk of Webvan's assets to Louis Borders, who founded the online grocer.
Through his Mercury Acquisitions, Borders submitted a bid of $2.5 million for the software and other assets, a bid that was withdrawn when Kaiser's higher offer materialized.
While Kaiser did not specify its plans for the Webvan assets, speculation was that it would use the distribution center to stock health care items for its network of hospitals in the Oakland area.
The hospital network is part of Kaiser Foundation Health Plan, a health maintenance organization (HMO) with 8 million members and 11,000 doctors.
Long Process
Webvan has been in selling-off mode for several months, even before it filed for bankruptcy in mid-July. Asset sales have been held in California, Washington state and Georgia.
According to McNutt, additional auctions are planned in coming weeks in several West Coast cities and in Chicago. Computer hardware will also be sold from the company's Foster City, California, headquarters at the end of this month.
Allen Arthur, director of real estate for Webvan, said leases at facilities in three other California cities -- Carson, Asuza and Fullerton -- had been assigned to other users.
Part of Webvan's original growth strategy was to build a nationwide infrastructure of distribution facilities to enable fast and inexpensive delivery of groceries.
"We made great strides in eliminating our lease liabilities," Allen said.
New Gig for Shaheen
Meanwhile, former Webvan chief executive officer George Shaheen, whose retirement package of $375,000 per year made him one of the largest unsecured creditors in Webvan's bankruptcy, has landed a new job.
Shaheen has been named to the board of directors of Closedloop Solutions, which makes financial planning solutions for major corporations. Closedloop did not disclose what compensation Shaheen would receive for serving on the board.
Webvan burned through about $850 million in funding before shutting down and was
widely criticized for Shaheen's golden parachute, which came several months before the
company's abrupt closure.
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